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Do Hedge Funds and Insiders Love Sigma Designs Inc (SIGM)?

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Sigma Designs Inc (NASDAQ:SIGM) investors should pay attention to an increase in support from the world’s most elite money managers in recent months.

In the eyes of most stock holders, hedge funds are assumed to be underperforming, old investment vehicles of years past. While there are over 8000 funds with their doors open at present, we at Insider Monkey choose to focus on the bigwigs of this club, about 450 funds. It is estimated that this group controls the majority of the smart money’s total asset base, and by paying attention to their highest performing equity investments, we have figured out a number of investment strategies that have historically outpaced the 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 started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Chuck Royce

Just as beneficial, optimistic insider trading activity is a second way to break down the investments you’re interested in. There are a number of stimuli for an upper level exec to get rid of shares of his or her company, but just one, very clear reason why they would behave bullishly. Several empirical studies have demonstrated the useful potential of this strategy if investors know where to look (learn more here).

With all of this in mind, we’re going to take a glance at the recent action encompassing Sigma Designs Inc (NASDAQ:SIGM).

Hedge fund activity in Sigma Designs Inc (NASDAQ:SIGM)

Heading into Q2, a total of 10 of the hedge funds we track were long in this stock, a change of 11% from one quarter earlier. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were upping their holdings meaningfully.

When looking at the hedgies we track, Chuck Royce’s Royce & Associates had the biggest position in Sigma Designs Inc (NASDAQ:SIGM), worth close to $9.7 million, comprising less than 0.1%% of its total 13F portfolio. Coming in second is John W. Rogers of Ariel Investments, with a $3.5 million position; 0.1% of its 13F portfolio is allocated to the stock. Other hedge funds with similar optimism include Jim Simons’s Renaissance Technologies, Christopher Zepf and Brian Thonn’s Kingdom Ridge Capital and David Moradi’s Anthion Management.

As one would reasonably expect, specific money managers have been driving this bullishness. Highbridge Capital Management, managed by Glenn Russell Dubin, established the most outsized position in Sigma Designs Inc (NASDAQ:SIGM). Highbridge Capital Management had 0.5 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $0.1 million position during the quarter. The only other fund with a new position in the stock is Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.

What have insiders been doing with Sigma Designs Inc (NASDAQ:SIGM)?

Insider buying is particularly usable when the company we’re looking at has seen transactions within the past half-year. Over the latest half-year time period, Sigma Designs Inc (NASDAQ:SIGM) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Sigma Designs Inc (NASDAQ:SIGM). These stocks are MaxLinear, Inc. (NYSE:MXL), Ultra Clean Holdings Inc (NASDAQ:UCTT), Rubicon Technology, Inc. (NASDAQ:RBCN), Canadian Solar Inc. (NASDAQ:CSIQ), and Actions Semiconductor Co., Ltd. (ADR) (NASDAQ:ACTS). This group of stocks belong to the semiconductor – specialized industry and their market caps resemble SIGM’s market cap.

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