Is LTX-Credence Corp (LTXC) Going to Burn These Hedge Funds?
Should LTX-Credence Corp (NASDAQ:LTXC) investors track the following data?
At the moment, there are many indicators market participants can use to watch publicly traded companies. A couple of the best are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best investment managers can outperform the S&P 500 by a solid margin (see just how much).
Just as key, optimistic insider trading sentiment is a second way to analyze the financial markets. There are a number of stimuli for a bullish insider to downsize shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Many academic studies have demonstrated the impressive potential of this tactic if "monkeys" understand where to look (learn more here).
Now that that's out of the way, it's important to examine the latest info for LTX-Credence Corp (NASDAQ:LTXC).
What have hedge funds been doing with LTX-Credence Corp (NASDAQ:LTXC)?
In preparation for the third quarter, a total of 9 of the hedge funds we track were long in this stock, a change of -36% from the first quarter. With hedgies' capital changing hands, there exists an "upper tier" of notable hedge fund managers who were increasing their stakes considerably.
When using filings from the hedgies we track, Brett Hendrickson's Nokomis Capital had the largest position in LTX-Credence Corp (NASDAQ:LTXC), worth close to $17 million, accounting for 6.9% of its total 13F portfolio. On Nokomis Capital's heels is Royce & Associates, managed by Chuck Royce, which held a $12.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include Joseph A. Jolson's Harvest Capital Strategies, Jim Simons's Renaissance Technologies and Eric Bannasch's Cadian Capital.
Since LTX-Credence Corp (NASDAQ:LTXC) has witnessed declining interest from upper-tier hedge fund managers, we can see that there was a specific group of fund managers that decided to sell off their full holdings last quarter. At the top of the heap, Dmitry Balyasny's Balyasny Asset Management cut the biggest investment of the 450+ funds we watch, worth an estimated $1.8 million in stock, and David Moradi of Anthion Management was right behind this move, as the fund sold off about $1.1 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 5 funds last quarter.
How are insiders trading LTX-Credence Corp (NASDAQ:LTXC)?
Legal insider trading, particularly when it's bullish, is most useful when the company in focus has experienced transactions within the past six months. Over the latest half-year time period, LTX-Credence Corp (NASDAQ:LTXC) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We'll go over the relationship between both of these indicators in other stocks similar to LTX-Credence Corp (NASDAQ:LTXC). These stocks are Cohu, Inc. (NASDAQ:COHU), Daqo New Energy Corp (NYSE:DQ), Nova Measuring Instruments Ltd. (NASDAQ:NVMI), Nanometrics Incorporated (NASDAQ:NANO), and Enphase Energy Inc (NASDAQ:ENPH). All of these stocks are in the semiconductor equipment & materials industry and their market caps resemble LTXC's market cap.
# of Hedge Funds
# of Insiders Buying
# of Insiders Selling
Cohu, Inc. (NASDAQ:COHU)
Daqo New Energy Corp (NYSE:DQ)
Nova Measuring Instruments Ltd. (NASDAQ:NVMI)
Nanometrics Incorporated (NASDAQ:NANO)
Enphase Energy Inc (NASDAQ:ENPH)
Using the returns explained by Insider Monkey's studies, average investors should always pay attention to hedge fund and insider trading activity, and LTX-Credence Corp (NASDAQ:LTXC) is an important part of this process.