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Do Hedge Funds and Insiders Love TriQuint Semiconductor (TQNT)?: Diodes Incorporated (DIOD), EZchip Semiconductor Ltd. (EZCH)

Is TriQuint Semiconductor (NASDAQ:TQNT) a buy right now? Investors who are in the know are taking a bearish view. The number of bullish hedge fund positions decreased by 5 in recent months.

TriQuint Semiconductor (NASDAQ:TQNT)If you’d ask most stock holders, hedge funds are perceived as underperforming, outdated financial vehicles of years past. While there are more than 8000 funds in operation at the moment, we look at the top tier of this group, about 450 funds. It is estimated that this group oversees the lion’s share of the smart money’s total capital, and by tracking their highest performing equity investments, we have identified a few investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outstripped 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 25 percentage points in 6.5 month (see the details here).

Equally as key, optimistic insider trading activity is another way to break down the stock market universe. Just as you’d expect, there are lots of stimuli for a corporate insider to downsize shares of his or her company, but only one, very clear reason why they would buy. Several empirical studies have demonstrated the impressive potential of this tactic if piggybackers know where to look (learn more here).

With these “truths” under our belt, it’s important to take a gander at the recent action encompassing TriQuint Semiconductor (NASDAQ:TQNT).

How are hedge funds trading TriQuint Semiconductor (NASDAQ:TQNT)?

At the end of the fourth quarter, a total of 12 of the hedge funds we track were bullish in this stock, a change of -29% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes significantly.

According to our comprehensive database, Fisher Asset Management, managed by Ken Fisher, holds the largest position in TriQuint Semiconductor (NASDAQ:TQNT). Fisher Asset Management has a $31 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Chuck Royce of Royce & Associates, with a $11 million position; 1.1% of its 13F portfolio is allocated to the stock. Some other peers that are bullish include Ken Griffin’s Citadel Investment Group, Israel Englander’s Millennium Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Seeing as TriQuint Semiconductor (NASDAQ:TQNT) has witnessed falling interest from the smart money, it’s safe to say that there exists a select few funds that elected to cut their full holdings in Q4. At the top of the heap, Ryan Frick and Oliver Evans’s Dorsal Capital Management cut the biggest investment of all the hedgies we track, comprising an estimated $13 million in stock., and Brett Hendrickson of Nokomis Capital was right behind this move, as the fund said goodbye to about $9 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 5 funds in Q4.

How have insiders been trading TriQuint Semiconductor (NASDAQ:TQNT)?

Insider buying is best served when the company we’re looking at has seen transactions within the past half-year. Over the latest 180-day time period, TriQuint Semiconductor (NASDAQ:TQNT) has experienced 5 unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to TriQuint Semiconductor (NASDAQ:TQNT). These stocks are Diodes Incorporated (NASDAQ:DIOD), EZchip Semiconductor Ltd. (NASDAQ:EZCH), InvenSense Inc (NYSE:INVN), OmniVision Technologies, Inc. (NASDAQ:OVTI), and Cabot Microelectronics Corporation (NASDAQ:CCMP). This group of stocks are in the semiconductor – integrated circuits industry and their market caps resemble TQNT’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Diodes Incorporated (NASDAQ:DIOD) 7 0 0
EZchip Semiconductor Ltd. (NASDAQ:EZCH) 7 0 0
InvenSense Inc (NYSE:INVN) 11 0 6
OmniVision Technologies, Inc. (NASDAQ:OVTI) 17 0 2
Cabot Microelectronics Corporation (NASDAQ:CCMP) 5 0 13

With the results exhibited by Insider Monkey’s studies, retail investors should always keep an eye on hedge fund and insider trading sentiment, and TriQuint Semiconductor (NASDAQ:TQNT) is an important part of this process.

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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.

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