NN, Inc. (NNBR): Insiders Aren’t Crazy About It

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Is NN, Inc. (NASDAQ:NNBR) a bargain? The smart money is becoming hopeful. The number of long hedge fund positions advanced by 3 lately.

If you’d ask most market participants, hedge funds are seen as underperforming, old financial tools of yesteryear. While there are greater than 8000 funds in operation today, we at Insider Monkey hone in on the leaders of this club, about 450 funds. It is widely believed that this group has its hands on the lion’s share of the hedge fund industry’s total asset base, and by tracking their best equity investments, we have spotted a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outperformed 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 23.3 percentage points in 8 months (explore the details and some picks here).

Equally as beneficial, positive insider trading sentiment is another way to parse down the world of equities. Obviously, there are many reasons for a bullish insider to get rid of shares of his or her company, but just one, very clear reason why they would initiate a purchase. Several academic studies have demonstrated the impressive potential of this method if shareholders know what to do (learn more here).

Now, it’s important to take a look at the latest action encompassing NN, Inc. (NASDAQ:NNBR).

What does the smart money think about NN, Inc. (NASDAQ:NNBR)?

At the end of the first quarter, a total of 8 of the hedge funds we track held long positions in this stock, a change of 60% from the first quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their stakes significantly.

NN Inc. (NNBR)According to our comprehensive database, Royce & Associates, managed by Chuck Royce, holds the biggest position in NN, Inc. (NASDAQ:NNBR). Royce & Associates has a $9.3 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Royce & Associates’s heels is Robert B. Gillam of McKinley Capital Management, with a $1.6 million position; 0.1% of its 13F portfolio is allocated to the company. Some other hedge funds that hold long positions include Peter Algert and Kevin Coldiron’s Algert Coldiron Investors, Jim Simons’s Renaissance Technologies and John Overdeck and David Siegel’s Two Sigma Advisors.

As aggregate interest increased, key money managers have been driving this bullishness. Bryn Mawr Capital, managed by Ken Gray and Steve Walsh, assembled the most valuable position in NN, Inc. (NASDAQ:NNBR). Bryn Mawr Capital had 0.2 million invested in the company at the end of the quarter. Mark A. Nordlicht’s Platinum Management also made a $0.1 million investment in the stock during the quarter. The only other fund with a brand new NNBR position is Matthew Hulsizer’s PEAK6 Capital Management.

What have insiders been doing with NN, Inc. (NASDAQ:NNBR)?

Insider trading activity, especially when it’s bullish, is most useful when the primary stock in question has experienced transactions within the past half-year. Over the last 180-day time frame, NN, Inc. (NASDAQ:NNBR) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to NN, Inc. (NASDAQ:NNBR). These stocks are RBC Bearings Incorporated (NASDAQ:ROLL), Chicago Rivet & Machine Co. (NYSEAMEX:CVR), Kaydon Corporation (NYSE:KDN), Blount International, Inc. (NYSE:BLT), and Hardinge Inc. (NASDAQ:HDNG). This group of stocks belong to the machine tools & accessories industry and their market caps are closest to NNBR’s market cap.

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