ANADIGICS, Inc. (ANAD): Are Hedge Funds Right About This Stock?

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Is ANADIGICS, Inc. (NASDAQ:ANAD) a safe investment now? The smart money is in a pessimistic mood. The number of bullish hedge fund positions fell by 1 lately.

According to most stock holders, hedge funds are viewed as slow, outdated financial vehicles of years past. While there are greater than 8000 funds in operation at the moment, we hone in on the bigwigs of this group, around 450 funds. Most estimates calculate that this group has its hands on the lion’s share of all hedge funds’ total capital, and by paying attention to their best picks, we have revealed a number of investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Chuck RoyceJust as important, positive insider trading activity is another way to break down the world of equities. Obviously, there are many incentives for a corporate insider to get rid of shares of his or her company, but just one, very clear reason why they would behave bullishly. Several academic studies have demonstrated the impressive potential of this tactic if you know what to do (learn more here).

Consequently, we’re going to take a look at the latest action surrounding ANADIGICS, Inc. (NASDAQ:ANAD).

What have hedge funds been doing with ANADIGICS, Inc. (NASDAQ:ANAD)?

In preparation for this quarter, a total of 5 of the hedge funds we track were long in this stock, a change of -17% from the previous quarter. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes substantially.

Of the funds we track, Chuck Royce’s Royce & Associates had the most valuable position in ANADIGICS, Inc. (NASDAQ:ANAD), worth close to $5.9 million, comprising less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Israel Englander of Millennium Management, with a $2 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other hedgies with similar optimism include Charles Clough’s Clough Capital Partners, Matthew Hulsizer’s PEAK6 Capital Management and Ken Griffin’s Citadel Investment Group.

Seeing as ANADIGICS, Inc. (NASDAQ:ANAD) has experienced declining sentiment from the aggregate hedge fund industry, it’s easy to see that there lies a certain “tier” of hedge funds who sold off their full holdings heading into Q2. At the top of the heap, Jim Simons’s Renaissance Technologies cut the biggest stake of the “upper crust” of funds we track, totaling close to $0.3 million in stock.. Ben Levine, Andrew Manuel and Stefan Renold’s fund, LMR Partners, also dumped its stock, about $0.1 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 1 funds heading into Q2.

How have insiders been trading ANADIGICS, Inc. (NASDAQ:ANAD)?

Insider trading activity, especially when it’s bullish, is best served when the primary stock in question has seen transactions within the past 180 days. Over the latest 180-day time period, ANADIGICS, Inc. (NASDAQ:ANAD) has seen zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to ANADIGICS, Inc. (NASDAQ:ANAD). These stocks are DSP Group, Inc. (NASDAQ:DSPG), EMCORE Corporation (NASDAQ:EMKR), and Pericom Semiconductor (NASDAQ:PSEM). This group of stocks belong to the semiconductor – integrated circuits industry and their market caps match ANAD’s market cap.

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