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Do Hedge Funds and Insiders Love Silicon Motion Technology Corp. (ADR) (SIMO)?

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Silicon Motion Technology Corp. (ADR) (NASDAQ:SIMO) was in 11 hedge funds’ portfolio at the end of the first quarter of 2013. SIMO shareholders have witnessed an increase in enthusiasm from smart money of late. There were 7 hedge funds in our database with SIMO holdings at the end of the previous quarter.


In today’s marketplace, there are many methods shareholders can use to monitor the equity markets. A pair of the best are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite investment managers can outperform the market by a healthy amount (see just how much).

Just as key, optimistic insider trading activity is a second way to break down the marketplace. As the old adage goes: there are a number of reasons for a corporate insider to sell shares of his or her company, but only one, very obvious reason why they would buy. Many academic studies have demonstrated the useful potential of this strategy if piggybackers understand where to look (learn more here).

Now, let’s take a look at the key action surrounding Silicon Motion Technology Corp. (ADR) (NASDAQ:SIMO).

What does the smart money think about Silicon Motion Technology Corp. (ADR) (NASDAQ:SIMO)?

Heading into Q2, a total of 11 of the hedge funds we track were bullish in this stock, a change of 57% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes significantly.

Of the funds we track, Millennium Management, managed by Israel Englander, holds the most valuable position in Silicon Motion Technology Corp. (ADR) (NASDAQ:SIMO). Millennium Management has a $15.8 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Gregory A. Weaver of Invicta Capital Management, with a $5.9 million position; 2.6% of its 13F portfolio is allocated to the company. Some other hedge funds with similar optimism include Jim Simons’s Renaissance Technologies, D. E. Shaw’s D E Shaw and Chuck Royce’s Royce & Associates.

Consequently, specific money managers have been driving this bullishness. D E Shaw, managed by D. E. Shaw, created the biggest position in Silicon Motion Technology Corp. (ADR) (NASDAQ:SIMO). D E Shaw had 2.7 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also made a $1.6 million investment in the stock during the quarter. The following funds were also among the new SIMO investors: Ken Grossman and Glen Schneider’s SG Capital Management, Andy Redleaf’s Whitebox Advisors, and Matthew Tewksbury’s Stevens Capital Management.

What have insiders been doing with Silicon Motion Technology Corp. (ADR) (NASDAQ:SIMO)?

Insider buying is particularly usable when the company in question has experienced transactions within the past six months. Over the last 180-day time period, Silicon Motion Technology Corp. (ADR) (NASDAQ:SIMO) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Silicon Motion Technology Corp. (ADR) (NASDAQ:SIMO). These stocks are Power One Inc (NASDAQ:PWER), Methode Electronics Inc. (NYSE:MEI), UniPixel Inc (NASDAQ:UNXL), Orbotech Ltd. (NASDAQ:ORBK), and CTS Corporation (NYSE:CTS). This group of stocks belong to the diversified electronics industry and their market caps resemble SIMO’s market cap.

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