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Hedge Funds Are Betting On SanDisk Corporation (NASDAQ:SNDK)

SanDisk Corporation (NASDAQ:SNDK) has seen an increase in enthusiasm from smart money lately.

SanDisk Corporation (NASDAQ:SNDK)

According to most investors, hedge funds are assumed to be unimportant, old investment vehicles of yesteryear. While there are more than 8000 funds trading at present, we hone in on the upper echelon of this group, around 450 funds. Most estimates calculate that this group oversees the majority of all hedge funds’ total capital, and by tracking their best stock picks, we have found a few investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually 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 topped the S&P 500 index by 25 percentage points in 6.5 month (see the details here).

Equally as beneficial, optimistic insider trading activity is another way to parse down the marketplace. Just as you’d expect, there are many motivations for an upper level exec to downsize shares of his or her company, but just one, very simple reason why they would buy. Several academic studies have demonstrated the impressive potential of this strategy if you understand where to look (learn more here).

With these “truths” under our belt, we’re going to take a gander at the recent action surrounding SanDisk Corporation (NASDAQ:SNDK).

How are hedge funds trading SanDisk Corporation (NASDAQ:SNDK)?

At year’s end, a total of 47 of the hedge funds we track were bullish in this stock, a change of 4% from the previous quarter. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were upping their holdings substantially.

Of the funds we track, Edinburgh Partners, managed by Sandy Nairn, holds the most valuable position in SanDisk Corporation (NASDAQ:SNDK). Edinburgh Partners has a $196 million billion position in the stock, comprising 11.1% of its 13F portfolio. Sitting at the No. 2 spot is Viking Global, managed by Andreas Halvorsen, which held a $195 million position; the fund has 1.4% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Michael Lowenstein’s Kensico Capital, Rob Citrone’s Discovery Capital Management and D. E. Shaw’s D E Shaw.

With a general bullishness amongst the heavyweights, specific money managers have jumped into SanDisk Corporation (NASDAQ:SNDK) headfirst. Andor Capital Management, managed by Daniel Benton, assembled the largest position in SanDisk Corporation (NASDAQ:SNDK). Andor Capital Management had 33 million invested in the company at the end of the quarter. Ryan Frick and Oliver Evans’s Dorsal Capital Management also initiated a $30 million position during the quarter. The following funds were also among the new SNDK investors: Jim Chanos’s Kynikos, Jeffrey Vinik’s Vinik Asset Management, and Michael Messner’s Seminole Capital (Investment Mgmt).

How are insiders trading SanDisk Corporation (NASDAQ:SNDK)?

Insider buying is particularly usable when the company in question has experienced transactions within the past six months. Over the latest six-month time period, SanDisk Corporation (NASDAQ:SNDK) has seen zero unique insiders purchasing, and 7 insider sales (see the details of insider trades here).

With the returns demonstrated by the aforementioned research, everyday investors must always monitor hedge fund and insider trading activity, and SanDisk Corporation (NASDAQ:SNDK) shareholders fit into this picture quite nicely.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.

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