Cree, Inc. (CREE): Are Hedge Funds Right About This Stock?

The third-quarter stock market correction has turned out to resemble the situation observed during the Asian financial crisis of 1997. The two relatively short-lived corrections occurred at a time with stable interest rates, falling commodity markets, with strong-performing technology and healthcare sectors, and struggling energy sector. Similarly, the two corrections followed long periods without a correction, which had to come sooner or later and it did. Even so, several prominent hedge fund investors publicly asserted their bearish view on the current state of the U.S. equity markets, suggesting that they significantly cut their exposure to equities during the latest quarter. Having said that, it would be worthwhile to take a look at the hedge fund sentiment on Cree, Inc. (NASDAQ:CREE) in order to identify whether reputable and successful top money managers continue to believe in its potential.

Hedge fund interest in Cree, Inc. (NASDAQ:CREE) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare CREE to other stocks, including Univar Inc (NYSE:UNVR), Healthcare Realty Trust Inc (NYSE:HR), and ACI Worldwide Inc (NASDAQ:ACIW) to get a better sense of its popularity.

In the financial world there are a lot of tools shareholders put to use to value stocks. Two of the most useful tools are hedge fund and insider trading interest. We have shown that, historically, those who follow the best picks of the best money managers can trounce the S&P 500 by a significant margin (see the details here).

Now, let’s review the fresh action surrounding Cree, Inc. (NASDAQ:CREE).

What have hedge funds been doing with Cree, Inc. (NASDAQ:CREE)?

At the end of the third quarter, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, unchanged from the previous quarter. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Mike Masters’ Masters Capital Management has the most valuable call position in Cree, Inc. (NASDAQ:CREE), worth close to $23.8 million, comprising 0.8% of its total 13F portfolio. On Masters Capital Management’s heels is Ken Griffin’s Citadel Investment Group, with an $10.8 million call position; the fund has less than 0.1% of its 13F portfolio invested in the stock.