Stock market watchers have surely noticed that the start of 2016 has been unkind to the technology sector. Signs of weakening economic conditions and breathers in business spending were bad news for most technology firms, which have triggered the cruel correction in early 2016 that might have created new attractive entry points for investors. Although the brutal correction might have resulted in lower valuations for most technology companies, that does not necessarily mean tech companies boast dirt-cheap valuations. Insider Monkey compiled a list of five low-priced tech stocks favored by the hedge funds tracked by our team. These low-priced stocks, most of which have share prices below $10, may have a low price tag relative to other players in the technology sector, but that does not mean they are extremely undervalued by Mr. Market. That said, let’s have a look at the most loved low-priced technology stocks within the hedge fund industry.
At Insider Monkey, we track around 760 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details about our small-cap strategy).
#5. Himax Technologies Inc. (ADR) (NASDAQ:HIMX)
– Investors with long positions as of March 31: 27
– Aggregate value of investors’ holdings as of March 31: $161.86 Million
The hedge fund sentiment towards Himax Technologies Inc. (ADR) (NASDAQ:HIMX) increased considerably during the first quarter of 2016, as the number of funds from our system with stakes in the company rose to 27 from 17 quarter-over-quarter. Similarly, the aggregate value of those stakes climbed to $161.86 million from $111.69 during the three-month period. Those 27 asset managers amassed nearly 14% of the Taiwan-headquartered company’s outstanding shares. The fabless semiconductor solution provider has seen its market value advance 13% since the beginning of 2016 even though Himax’s ADSs plummeted following the release of the company’s seemingly strong first-quarter earnings report in early May. The huge drop forced the company to issue a separate statement in the subsequent days reiterating confidence in the positive outlook for both top- and bottom-line growth in 2016. Himax Technologies is particularly enthusiastic about the business prospects in its Augmented Reality and Virtual Reality segments. Columbus Circle Investors, managed by Clifford G. Fox, acquired a new stake of 1.88 million shares of Himax Technologies Inc. (ADR) (NASDAQ:HIMX) during the first quarter of 2016.