Audience Inc (NASDAQ:ADNC) was in 6 hedge funds’ portfolio at the end of December. ADNC investors should pay attention to a decrease in hedge fund sentiment in recent months. There were 6 hedge funds in our database with ADNC positions at the end of the previous quarter.
In the eyes of most market participants, hedge funds are assumed to be underperforming, outdated investment vehicles of years past. While there are over 8000 funds trading today, we look at the top tier of this group, about 450 funds. It is estimated that this group has its hands on most of all hedge funds’ total asset base, and by tracking their highest performing picks, we have found a few investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 24 percentage points in 7 months (see the details here).
Just as key, bullish insider trading activity is a second way to parse down the marketplace. Obviously, there are lots of reasons for an insider to sell shares of his or her company, but just one, very simple reason why they would buy. Various empirical studies have demonstrated the impressive potential of this strategy if “monkeys” understand what to do (learn more here).
With all of this in mind, it’s important to take a look at the recent action encompassing Audience Inc (NASDAQ:ADNC).
How are hedge funds trading Audience Inc (NASDAQ:ADNC)?
Heading into 2013, a total of 6 of the hedge funds we track were long in this stock, a change of 0% from one quarter earlier. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their holdings significantly.
Seeing as Audience Inc (NASDAQ:ADNC) has experienced bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there were a few hedge funds who were dropping their full holdings heading into 2013. Intriguingly, Leon Cooperman’s Omega Advisors cut the biggest investment of the 450+ funds we track, totaling close to $4.7 million in stock., and Mike Vranos of Ellington was right behind this move, as the fund cut about $0.9 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
What do corporate executives and insiders think about Audience Inc (NASDAQ:ADNC)?
Insider trading activity, especially when it’s bullish, is most useful when the company in focus has experienced transactions within the past half-year. Over the latest half-year time period, Audience Inc (NASDAQ:ADNC) has experienced 2 unique insiders buying, and 5 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Audience Inc (NASDAQ:ADNC). These stocks are Volterra Semiconductor Corporation (NASDAQ:VLTR), Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE), Peregrine Semiconductor Corp (NASDAQ:PSMI), Oplink Communications, Inc (NASDAQ:OPLK), and ParkerVision, Inc. (NASDAQ:PRKR). This group of stocks are the members of the semiconductor – integrated circuits industry and their market caps are similar to ADNC’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Volterra Semiconductor Corporation (NASDAQ:VLTR) | 12 | 0 | 3 |
| Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE) | 6 | 0 | 0 |
| Peregrine Semiconductor Corp (NASDAQ:PSMI) | 6 | 4 | 0 |
| Oplink Communications, Inc (NASDAQ:OPLK) | 11 | 0 | 0 |
| ParkerVision, Inc. (NASDAQ:PRKR) | 3 | 0 | 1 |
With the results demonstrated by our strategies, everyday investors should always pay attention to hedge fund and insider trading sentiment, and Audience Inc (NASDAQ:ADNC) applies perfectly to this mantra.
