At The Motley Fool, we understand that it often pays to zig when the rest of Wall Street zags. Like us, hedge funds rarely move in lockstep with the broader market. By tracking these funds' buy and sell decisions, we can often gain valuable insights into opportunities the market might be missing.

Every quarter, any fund managers overseeing more than $100 million must publicly disclose their quarter-end holdings via the Securities and Exchange Commission's Form 13F. It lists all U.S.-traded securities the fund's manager held at the end of the quarter. Although the form doesn't disclose short positions or intraquarter trades, it can illuminate long stock bets.

Meet the D3 Family Funds
David Nierenberg
 is the founder of the D3 Family Funds, and its largest investor. The D3 Family Funds are long-term, actively engaged investors in a concentrated portfolio of illiquid, mostly public, undervalued, and micro-cap growth companies. The D3 Family Funds invest in domestic micro-cap companies with equity market capitalizations up to $1.5 billion at the time of investment. The total market value of D3 Family Funds' disclosed equity holdings as of March 31, 2011 -- the latest quarter for which data is available -- was $290 million across eight holdings.

The fund's eight largest positions (by value) and associated changes as of March 31 were:

  1. Move (Nasdaq: MOVE) -- no change
  2. Electro Scientific Industries (Nasdaq: ESIO) -- increased 0.1%
  3. Heartland Payment Systems (NYSE: HPY) -- reduced 9.9%
  4. MedCath (Nasdaq: MDTH) -- no change
  5. RadiSys (Nasdaq: RSYS) -- no change
  6. Natus Medical (Nasdaq: BABY) -- reduced 13%
  7. Asset Acceptance Capital (Nasdaq: AACC) -- no change
  8. Zoran (Nasdaq: ZRAN) -- new

Selected Q1 2011 commentary
Here's where the firm is winning and losing, and making new bets, at the moment:

  • Current winners: Natus Medical did well, rising 18% in the first quarter. The stock composed 10.8% of the total portfolio.
  • Current loser: Asset Acceptance fell 9.4% in price in the first quarter. It accounted for 7.8% of the entire portfolio.
  • New bets: The only new addition, Zoran, composes 5.5% of the total portfolio.

So there you have it -- the blow-by-blow of D3 Family of Funds' latest moves. Tell us what you think in the comments section below.

Motley Fool newsletter services have recommended buying shares of Natus Medical and Heartland Payment Systems. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.