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Rudolph Technologies Inc (NASDAQ:RTEC): Hedge Funds and Insiders Are Bearish, What Should You Do? – Zygo Corporation (NASDAQ:ZIGO), Fluidigm Corporation (NASDAQ:FLDM)

Rudolph Technologies Inc (NASDAQ:RTEC) was in 12 hedge funds’ portfolio at the end of the fourth quarter of 2012. RTEC has experienced a decrease in hedge fund interest of late. There were 15 hedge funds in our database with RTEC holdings at the end of the previous quarter.

Rudolph Technologies Inc (NASDAQ:RTEC)

According to most investors, hedge funds are viewed as underperforming, outdated financial tools of years past. While there are over 8000 funds with their doors open at present, we at Insider Monkey hone in on the masters of this club, about 450 funds. It is widely believed that this group controls the majority of the hedge fund industry’s total capital, and by paying attention to their best stock picks, we have unearthed a few investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).

Equally as integral, optimistic insider trading sentiment is another way to parse down the marketplace. As the old adage goes: there are lots of reasons for a bullish insider to drop shares of his or her company, but just one, very obvious reason why they would buy. Many empirical studies have demonstrated the market-beating potential of this strategy if you know what to do (learn more here).

With these “truths” under our belt, we’re going to take a glance at the latest action encompassing Rudolph Technologies Inc (NASDAQ:RTEC).

How have hedgies been trading Rudolph Technologies Inc (NASDAQ:RTEC)?

Heading into 2013, a total of 12 of the hedge funds we track were bullish in this stock, a change of -20% from the third quarter. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their stakes substantially.

Of the funds we track, Chuck Royce’s Royce & Associates had the biggest position in Rudolph Technologies Inc (NASDAQ:RTEC), worth close to $19 million, comprising 0.1% of its total 13F portfolio. The second largest stake is held by Cupps Capital Management, managed by Drew Cupps, which held a $2 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other hedge funds that are bullish include Joel Greenblatt’s Gotham Asset Management, Clint Coghill’s Coghill Capital Management and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.

Since Rudolph Technologies Inc (NASDAQ:RTEC) has experienced declining sentiment from the aggregate hedge fund industry, logic holds that there exists a select few funds that decided to sell off their entire stakes heading into 2013. At the top of the heap, “Richard S. Meisenberg’s ACK Asset Management dumped the biggest investment of the 450+ funds we watch, comprising close to $2 million in stock., and Jim Simons of Renaissance Technologies was right behind this move, as the fund sold off about $1 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 3 funds heading into 2013.

How are insiders trading Rudolph Technologies Inc (NASDAQ:RTEC)?

Insider buying is particularly usable when the company in focus has seen transactions within the past six months. Over the last six-month time frame, Rudolph Technologies Inc (NASDAQ:RTEC) has experienced zero unique insiders purchasing, and 8 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Rudolph Technologies Inc (NASDAQ:RTEC). These stocks are Landauer, Inc. (NYSE:LDR), Zygo Corporation (NASDAQ:ZIGO), GSI Group Inc. (USA) (NASDAQ:GSIG), Fluidigm Corporation (NASDAQ:FLDM), and Affymetrix, Inc. (NASDAQ:AFFX). This group of stocks belong to the scientific & technical instruments industry and their market caps match RTEC’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Landauer, Inc. (NYSE:LDR) 4 0 0
Zygo Corporation (NASDAQ:ZIGO) 8 2 1
GSI Group Inc. (USA) (NASDAQ:GSIG) 8 0 0
Fluidigm Corporation (NASDAQ:FLDM) 7 2 6
Affymetrix, Inc. (NASDAQ:AFFX) 11 0 0

With the returns shown by the aforementioned time-tested strategies, retail investors must always keep an eye on hedge fund and insider trading activity, and Rudolph Technologies Inc (NASDAQ:RTEC) is an important part of this process.