Should MKS Instruments, Inc. (NASDAQ:MKSI) investors track the following data?
Now, according to many traders, hedge funds are seen as useless, old investment tools of a forgotten age. Although there are over 8,000 hedge funds trading today, Insider Monkey aim at the upper echelon of this club, around 525 funds. It is assumed that this group oversees the lion’s share of the smart money’s total assets, and by watching their highest quality equity investments, we’ve figured out a few investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outperformed 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 outclassed the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).
Just as useful, bullish insider trading activity is a second way to look at the stock market universe. There are a number of stimuli for an insider to get rid of shares of his or her company, but only one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the useful potential of this tactic if “monkeys” understand what to do (learn more here).
Furthermore, let’s study the newest info for MKS Instruments, Inc. (NASDAQ:MKSI).
What have hedge funds been doing with MKS Instruments, Inc. (NASDAQ:MKSI)?
At Q2’s end, a total of 11 of the hedge funds we track held long positions in this stock, a change of -21% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their stakes substantially.
According to our 13F database, Royce & Associates, managed by Chuck Royce, holds the biggest position in MKS Instruments, Inc. (NASDAQ:MKSI). Royce & Associates has a $175.6 million position in the stock, comprising 0.5% of its 13F portfolio. Sitting at the No. 2 spot is AQR Capital Management, managed by Cliff Asness, which held a $21.4 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include Ken Fisher’s Fisher Asset Management, Jim Simons’s Renaissance Technologies and D. E. Shaw’s D E Shaw.
Due to the fact MKS Instruments, Inc. (NASDAQ:MKSI) has witnessed a fall in interest from the entirety of the hedge funds we track, it’s safe to say that there is a sect of money managers that decided to sell off their full holdings at the end of the second quarter. Interestingly, Ken Grossman and Glen Schneider’s SG Capital Management sold off the largest position of the “upper crust” of funds we key on, comprising an estimated $3.3 million in stock, and Joel Greenblatt of Gotham Asset Management was right behind this move, as the fund sold off about $3.2 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 3 funds at the end of the second quarter.
How have insiders been trading MKS Instruments, Inc. (NASDAQ:MKSI)?
Insider buying made by high-level executives is most useful when the primary stock in question has seen transactions within the past six months. Over the last six-month time period, MKS Instruments, Inc. (NASDAQ:MKSI) has experienced 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 MKS Instruments, Inc. (NASDAQ:MKSI). These stocks are Rexnord Corp (NYSE:RXN), Polypore International, Inc. (NYSE:PPO), Briggs & Stratton Corporation (NYSE:BGG), Hillenbrand, Inc. (NYSE:HI), and AIXTRON SE (ADR) (NASDAQ:AIXG). All of these stocks are in the diversified machinery industry and their market caps are closest to MKSI’s market cap.