In the eyes of most market participants, hedge funds are perceived as unimportant, old financial tools of years past. While there are greater than 8000 funds trading at the moment, we at Insider Monkey hone in on the upper echelon of this club, around 450 funds. It is estimated that this group has its hands on the lion’s share of the smart money’s total capital, and by monitoring their top investments, we have found a few investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outperformed 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 outpaced the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
Just as key, bullish insider trading activity is a second way to break down the financial markets. Obviously, there are lots of motivations for an executive to cut shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Various empirical studies have demonstrated the impressive potential of this strategy if shareholders know what to do (learn more here).
Consequently, it’s important to take a peek at the key action encompassing MaxLinear, Inc. (NYSE:MXL).
Hedge fund activity in MaxLinear, Inc. (NYSE:MXL)
At Q1’s end, a total of 7 of the hedge funds we track were bullish in this stock, a change of 17% from the first quarter. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were increasing their stakes significantly.
When looking at the hedgies we track, Nokomis Capital, managed by Brett Hendrickson, holds the most valuable position in MaxLinear, Inc. (NYSE:MXL). Nokomis Capital has a $11 million position in the stock, comprising 3.5% of its 13F portfolio. Sitting at the No. 2 spot is Kingdom Ridge Capital, managed by Christopher Zepf and Brian Thonn, which held a $2 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Other hedgies that are bullish include Jim Simons’s Renaissance Technologies, Peter Algert and Kevin Coldiron’s Algert Coldiron Investors and D. E. Shaw’s D E Shaw.
Now, specific money managers were leading the bulls’ herd. Kingdom Ridge Capital, managed by Christopher Zepf and Brian Thonn, established the most outsized position in MaxLinear, Inc. (NYSE:MXL). Kingdom Ridge Capital had 2 million invested in the company at the end of the quarter. Bruce Silver’s Silver Capital Management LLC also made a $0.2 million investment in the stock during the quarter.
What have insiders been doing with MaxLinear, Inc. (NYSE:MXL)?
Insider purchases made by high-level executives is most useful when the primary stock in question has seen transactions within the past 180 days. Over the latest 180-day time frame, MaxLinear, Inc. (NYSE:MXL) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to MaxLinear, Inc. (NYSE:MXL). These stocks are Canadian Solar Inc. (NASDAQ:CSIQ), Sigma Designs Inc (NASDAQ:SIGM), Alpha and Omega Semiconductor Ltd (NASDAQ:AOSL), Actions Semiconductor Co., Ltd. (ADR) (NASDAQ:ACTS), and Ultra Clean Holdings Inc (NASDAQ:UCTT). This group of stocks are the members of the semiconductor – specialized industry and their market caps are similar to MXL’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Canadian Solar Inc. (NASDAQ:CSIQ) | 4 | 0 | 0 |
| Sigma Designs Inc (NASDAQ:SIGM) | 10 | 0 | 0 |
| Alpha and Omega Semiconductor Ltd (NASDAQ:AOSL) | 5 | 0 | 2 |
| Actions Semiconductor Co., Ltd. (ADR) (NASDAQ:ACTS) | 0 | 0 | |
| Ultra Clean Holdings Inc (NASDAQ:UCTT) | 6 | 0 | 3 |
With the returns exhibited by our research, retail investors must always monitor hedge fund and insider trading sentiment, and MaxLinear, Inc. (NYSE:MXL) applies perfectly to this mantra.
