Is Semtech Corporation (NASDAQ:SMTC) a good investment now? Investors who are in the know are getting more bullish. The number of bullish hedge fund positions increased by 6 recently.
To the average investor, there are a multitude of methods shareholders can use to track stocks. A pair of the best are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best fund managers can trounce the S&P 500 by a very impressive margin (see just how much).
Just as beneficial, optimistic insider trading activity is a second way to break down the marketplace. Obviously, there are lots of motivations for a bullish insider to drop shares of his or her company, but only one, very simple reason why they would behave bullishly. Several academic studies have demonstrated the market-beating potential of this tactic if shareholders know where to look (learn more here).
Consequently, we’re going to take a gander at the latest action encompassing Semtech Corporation (NASDAQ:SMTC).
How have hedgies been trading Semtech Corporation (NASDAQ:SMTC)?
At the end of the fourth quarter, a total of 11 of the hedge funds we track were long in this stock, a change of 120% from the third quarter. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were upping their holdings meaningfully.
Of the funds we track, Mariko Gordon’s Daruma Asset Management had the biggest position in Semtech Corporation (NASDAQ:SMTC), worth close to $39 million, comprising 2.3% of its total 13F portfolio. Coming in second is D E Shaw, managed by D. E. Shaw, which held a $5 million position; the fund has 0% of its 13F portfolio invested in the stock. Some other peers that are bullish include Brian Ashford-Russell and Tim Woolley’s Polar Capital, Joseph A. Jolson’s Harvest Capital Strategies and Mark Kingdon’s Kingdon Capital.
As industrywide interest jumped, specific money managers were leading the bulls’ herd. Harvest Capital Strategies, managed by Joseph A. Jolson, established the largest position in Semtech Corporation (NASDAQ:SMTC). Harvest Capital Strategies had 2 million invested in the company at the end of the quarter. Mark Kingdon’s Kingdon Capital also initiated a $2 million position during the quarter. The other funds with new positions in the stock are Israel Englander’s Millennium Management, Neil Chriss’s Hutchin Hill Capital, and Steven Cohen’s SAC Capital Advisors.
Insider trading activity in Semtech Corporation (NASDAQ:SMTC)
Insider buying is particularly usable when the company in focus has seen transactions within the past half-year. Over the last half-year time frame, Semtech Corporation (NASDAQ:SMTC) has experienced zero unique insiders buying, and 16 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Semtech Corporation (NASDAQ:SMTC). These stocks are IPG Photonics Corporation (NASDAQ:IPGP), Fairchild Semiconductor Intl Inc (NYSE:FCS), Semiconductor Manufacturing Int’l (ADR) (NYSE:SMI), Hittite Microwave Corp (NASDAQ:HITT), and Microsemi Corporation (NASDAQ:MSCC). All of these stocks are in the semiconductor – integrated circuits industry and their market caps are closest to SMTC’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|IPG Photonics Corporation (NASDAQ:IPGP)||9||0||6|
|Fairchild Semiconductor Intl Inc (NYSE:FCS)||12||0||5|
|Semiconductor Manufacturing Int’l (ADR) (NYSE:SMI)||3||0||0|
|Hittite Microwave Corp (NASDAQ:HITT)||3||0||0|
|Microsemi Corporation (NASDAQ:MSCC)||4||0||13|
With the returns shown by Insider Monkey’s studies, everyday investors must always keep an eye on hedge fund and insider trading activity, and Semtech Corporation (NASDAQ:SMTC) is an important part of this process.
Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.