Nova Measuring Instruments Ltd. (NVMI): Are Hedge Funds Right About This Stock?

Nova Measuring Instruments Ltd. (NASDAQ:NVMI) was in 7 hedge funds’ portfolio at the end of December. NVMI investors should be aware of an increase in enthusiasm from smart money in recent months. There were 5 hedge funds in our database with NVMI holdings at the end of the previous quarter.

To the average investor, there are many metrics investors can use to monitor the equity markets. Some of the most under-the-radar are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top investment managers can trounce the market by a very impressive margin (see just how much).

Equally as key, bullish insider trading activity is a second way to break down the marketplace. There are many incentives for an executive to cut shares of his or her company, but just one, very obvious reason why they would buy. Several empirical studies have demonstrated the market-beating potential of this method if piggybackers know what to do (learn more here).

Consequently, we’re going to take a glance at the recent action encompassing Nova Measuring Instruments Ltd. (NASDAQ:NVMI).

How are hedge funds trading Nova Measuring Instruments Ltd. (NASDAQ:NVMI)?

Heading into 2013, a total of 7 of the hedge funds we track were long in this stock, a change of 40% from the third quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their stakes meaningfully.

According to our comprehensive database, Gregory A. Weaver’s Invicta Capital Management had the largest position in Nova Measuring Instruments Ltd. (NASDAQ:NVMI), worth close to $10.7 million, comprising 4.8% of its total 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, managed by Jim Simons, which held a $8.8 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining hedgies that are bullish include Kelly Cardwell’s Central Square Management, Peter Algert and Kevin Coldiron’s Algert Coldiron Investors and John Overdeck and David Siegel’s Two Sigma Advisors.

Nova Measuring Instruments Ltd. (NASDAQ:NVMI)Consequently, some big names were leading the bulls’ herd. Central Square Management, managed by Kelly Cardwell, initiated the largest position in Nova Measuring Instruments Ltd. (NASDAQ:NVMI). Central Square Management had 0.6 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $0.1 million investment in the stock during the quarter.

What have insiders been doing with Nova Measuring Instruments Ltd. (NASDAQ:NVMI)?

Insider trading activity, especially when it’s bullish, is particularly usable when the company we’re looking at has seen transactions within the past half-year. Over the last six-month time frame, Nova Measuring Instruments Ltd. (NASDAQ:NVMI) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Nova Measuring Instruments Ltd. (NASDAQ:NVMI). These stocks are Nanometrics Incorporated (NASDAQ:NANO), LTX-Credence Corp (NASDAQ:LTXC), Enphase Energy Inc (NASDAQ:ENPH), Cohu, Inc. (NASDAQ:COHU), and Daqo New Energy Corp (NYSE:DQ). All of these stocks are in the semiconductor equipment & materials industry and their market caps are closest to NVMI’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Nanometrics Incorporated (NASDAQ:NANO) 7 0 1
LTX-Credence Corp (NASDAQ:LTXC) 11 0 2
Enphase Energy Inc (NASDAQ:ENPH) 3 4 0
Cohu, Inc. (NASDAQ:COHU) 3 0 0
Daqo New Energy Corp (NYSE:DQ) 1 0 0

With the results exhibited by our time-tested strategies, everyday investors should always monitor hedge fund and insider trading sentiment, and Nova Measuring Instruments Ltd. (NASDAQ:NVMI) applies perfectly to this mantra.

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