Amkor Technology, Inc. (AMKR): Are Hedge Funds Right About This Stock?

Hedge funds run by legendary names like Nelson Peltz and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small caps are where they can generate significant out-performance. These stocks have been on a tear since the end of June, outperforming large-cap index funds by more than 10 percentage points. That’s why we pay special attention to hedge fund activity in these stocks.

Is Amkor Technology, Inc. (NASDAQ:AMKR) ready to rally soon? The best stock pickers are becoming hopeful. The number of bullish hedge fund investments went up by 4 recently. There were 16 hedge funds in our database with AMKR holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as La-Z-Boy Incorporated (NYSE:LZB), Renasant Corp. (NASDAQ:RNST), and SkyWest, Inc. (NASDAQ:SKYW) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

How have hedgies been trading Amkor Technology, Inc. (NASDAQ:AMKR)?

Heading into the fourth quarter of 2016, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a rise of 25% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in AMKR over the last 5 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, led by Jim Simons, holds the largest position in Amkor Technology, Inc. (NASDAQ:AMKR). Renaissance Technologies has a $38.4 million position in the stock. On Renaissance Technologies’ heels is D E Shaw, founded by David E. Shaw, which holds a $21 million position. Remaining hedge funds and institutional investors that are bullish include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Cliff Asness’ AQR Capital Management and Ken Griffin’s Citadel Investment Group. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

As one would reasonably expect, key money managers were breaking ground themselves. Millennium Management, led by Israel Englander, assembled the most valuable position in Amkor Technology, Inc. (NASDAQ:AMKR). Millennium Management had $3.6 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also made a $1.2 million investment in the stock during the quarter. The following funds were also among the new AMKR investors: Peter Algert and Kevin Coldiron’s Algert Coldiron Investors, Ken Griffin’s Citadel Investment Group, and George Hall’s Clinton Group.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Amkor Technology, Inc. (NASDAQ:AMKR) but similarly valued. These stocks are La-Z-Boy Incorporated (NYSE:LZB), Renasant Corp. (NASDAQ:RNST), SkyWest, Inc. (NASDAQ:SKYW), and Weis Markets, Inc. (NYSE:WMK). This group of stocks’ market valuations are closest to AMKR’s market valuation.

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $70 million. That figure was $123 million in AMKR’s case. La-Z-Boy Incorporated (NYSE:LZB) is the most popular stock in this table. On the other hand Renasant Corp. (NASDAQ:RNST) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Amkor Technology, Inc. (NASDAQ:AMKR) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

Disclosure: None