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Hedge Funds Are Betting On Spreadtrum Communications, Inc (ADR) (SPRD)

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Spreadtrum Communications, Inc (ADR) (NASDAQ:SPRD) was in 15 hedge funds’ portfolio at the end of March. SPRD investors should pay attention to an increase in hedge fund sentiment lately. There were 12 hedge funds in our database with SPRD positions at the end of the previous quarter.

To most stock holders, hedge funds are assumed to be underperforming, old financial tools of years past. While there are greater than 8000 funds trading today, we at Insider Monkey look at the aristocrats of this club, about 450 funds. Most estimates calculate that this group has its hands on the lion’s share of the smart money’s total asset base, and by monitoring their best stock picks, we have unsheathed a few investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum 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 outpaced the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Equally as integral, positive insider trading sentiment is another way to break down the world of equities. There are plenty of motivations for an insider to sell shares of his or her company, but just one, very clear reason why they would behave bullishly. Various academic studies have demonstrated the impressive potential of this strategy if shareholders know what to do (learn more here).

Keeping this in mind, we’re going to take a peek at the latest action encompassing Spreadtrum Communications, Inc (ADR) (NASDAQ:SPRD).

What have hedge funds been doing with Spreadtrum Communications, Inc (ADR) (NASDAQ:SPRD)?

At Q1’s end, a total of 15 of the hedge funds we track were long in this stock, a change of 25% from the previous quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their holdings substantially.

When looking at the hedgies we track, George Soros’s Soros Fund Management had the largest position in Spreadtrum Communications, Inc (ADR) (NASDAQ:SPRD), worth close to $42.6 million, comprising 0.5% of its total 13F portfolio. Coming in second is Josh Resnick of Jericho Capital Asset Management, with a $11.9 million position; the fund has 1.2% of its 13F portfolio invested in the stock. Some other hedgies with similar optimism include Charles Clough’s Clough Capital Partners, Jeffrey Vinik’s Vinik Asset Management and Matthew Hulsizer’s PEAK6 Capital Management.

Now, specific money managers have been driving this bullishness. Vinik Asset Management, managed by Jeffrey Vinik, created the largest position in Spreadtrum Communications, Inc (ADR) (NASDAQ:SPRD). Vinik Asset Management had 6.3 million invested in the company at the end of the quarter. Michael Novogratz’s Fortress Investment Group also initiated a $3.3 million position during the quarter. The other funds with new positions in the stock are Ken Grossman and Glen Schneider’s SG Capital Management, Dmitry Balyasny’s Balyasny Asset Management, and Mike Vranos’s Ellington.

Insider trading activity in Spreadtrum Communications, Inc (ADR) (NASDAQ:SPRD)

Bullish insider trading is most useful when the company we’re looking at has seen transactions within the past half-year. Over the latest half-year time frame, Spreadtrum Communications, Inc (ADR) (NASDAQ:SPRD) has experienced 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 Spreadtrum Communications, Inc (ADR) (NASDAQ:SPRD). These stocks are Advanced Micro Devices, Inc. (NYSE:AMD), Cypress Semiconductor Corporation (NASDAQ:CY), M/A-COM Technology Solutions Holdings (NASDAQ:MTSI), Intersil Corp (NASDAQ:ISIL), and Integrated Device Technology, Inc. (NASDAQ:IDTI). This group of stocks are the members of the semiconductor – broad line industry and their market caps match SPRD’s market cap.

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