Natus Medical Inc (BABY): Are Hedge Funds Right About This Stock?

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Should a Natus Medical Inc (NASDAQ:BABY) track the following data?

If you were to ask many of your fellow readers, hedge funds are seen as useless, outdated financial vehicles of a period lost to current times. Although there are over 8,000 hedge funds in operation in present day, this site focuses on the elite of this group, about 525 funds. Analysts calculate that this group has its hands on the lion’s share of the hedge fund industry’s total assets, and by tracking their highest performing equity investments, we’ve revealed a number of investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 33 percentage points in 11 months (find the details here).

Just as crucial, bullish insider trading activity is a second way to analyze the investments you’re interested in. As the old adage goes: there are lots of reasons for an upper level exec to drop shares of his or her company, but only one, very clear reason why they would behave bullishly. Plenty of empirical studies have demonstrated the useful potential of this method if shareholders understand what to do (learn more here).

Natus Medical Inc

Thus, we’re going to analyze the latest info surrounding Natus Medical Inc (NASDAQ:BABY).

What does the smart money think about Natus Medical Inc (NASDAQ:BABY)?

Heading into Q3, a total of 15 of the hedge funds we track were bullish in this stock, a change of -6% from the previous quarter. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were boosting their holdings significantly.

According to our 13F database, Broadfin Capital, managed by Kevin Kotler, holds the biggest position in Natus Medical Inc (NASDAQ:BABY). Broadfin Capital has a $35.4 million position in the stock, comprising 6.9% of its 13F portfolio. On Broadfin Capital’s heels is Samuel Isaly of OrbiMed Advisors, with a $19.5 million position; 0.4% of its 13F portfolio is allocated to the stock. Some other hedgies with similar optimism include Jay Petschek and Steven Major’s Corsair Capital Management, J. Carlo Cannell’s Cannell Capital and Stephen DuBois’s Camber Capital Management.

Due to the fact Natus Medical Inc (NASDAQ:BABY) has faced a fall in interest from the entirety of the hedge funds we track, we can see that there is a sect of hedgies who sold off their entire stakes in Q1. At the top of the heap, SAC Subsidiary’s CR Intrinsic Investors dropped the biggest stake of all the hedgies we track, totaling close to $2.5 million in stock. D. E. Shaw’s fund, D E Shaw, also cut its stock, about $0.2 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 1 funds in Q1.

How are insiders trading Natus Medical Inc (NASDAQ:BABY)?

Bullish insider trading is particularly usable when the company in focus has experienced transactions within the past half-year. Over the latest six-month time frame, Natus Medical Inc (NASDAQ:BABY) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to Natus Medical Inc (NASDAQ:BABY). These stocks are Syneron Medical Ltd. (NASDAQ:ELOS), Invacare Corporation (NYSE:IVC), Symmetry Medical Inc. (NYSE:SMA), Cynosure, Inc. (NASDAQ:CYNO), and GenMark Diagnostics, Inc (NASDAQ:GNMK). This group of stocks are in the medical appliances & equipment industry and their market caps are similar to BABY’s market cap.

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