Is Silicon Laboratories (NASDAQ:SLAB) a buy, sell, or hold? Hedge funds are betting on the stock. The number of bullish hedge fund positions increased by 2 in recent months.
If you’d ask most traders, hedge funds are perceived as slow, old investment tools of the past. While there are greater than 8000 funds in operation today, we look at the leaders of this group, about 450 funds. Most estimates calculate that this group has its hands on the lion’s share of all hedge funds’ total asset base, and by tracking their top picks, we have deciphered a few investment strategies that have historically outstripped the market. 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 outpaced the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).
Equally as key, bullish insider trading sentiment is a second way to break down the investments you’re interested in. Obviously, there are plenty of incentives for a bullish insider to drop shares of his or her company, but just one, very simple reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the useful potential of this tactic if “monkeys” understand what to do (learn more here).
With all of this in mind, we’re going to take a peek at the latest action encompassing Silicon Laboratories (NASDAQ:SLAB).
How are hedge funds trading Silicon Laboratories (NASDAQ:SLAB)?
Heading into 2013, a total of 12 of the hedge funds we track held long positions in this stock, a change of 20% from the previous quarter. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were boosting their holdings meaningfully.
According to our comprehensive database, Ken Griffin’s Citadel Investment Group had the biggest position in Silicon Laboratories (NASDAQ:SLAB), worth close to $58.9 million, comprising 0.1% of its total 13F portfolio. On Citadel Investment Group’s heels is Philippe Laffont of Coatue Management, with a $33.9 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include Panayotis æTakisÆ Sparaggis’s Alkeon Capital Management, Phill Gross and Robert Atchinson’s Adage Capital Management and Clint Carlson’s Carlson Capital.
Consequently, key money managers have been driving this bullishness. Alkeon Capital Management, managed by Panayotis Takis Sparaggis, initiated the most outsized position in Silicon Laboratories (NASDAQ:SLAB). Alkeon Capital Management had 23.9 million invested in the company at the end of the quarter. Phill Gross and Robert Atchinson’s Adage Capital Management also made a $19.7 million investment in the stock during the quarter. The following funds were also among the new SLAB investors: Clint Carlson’s Carlson Capital and D. E. Shaw’s D E Shaw.
What do corporate executives and insiders think about Silicon Laboratories (NASDAQ:SLAB)?
Insider buying is at its handiest when the company we’re looking at has experienced transactions within the past six months. Over the latest six-month time frame, Silicon Laboratories (NASDAQ:SLAB) has experienced zero unique insiders buying, and 10 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 Silicon Laboratories (NASDAQ:SLAB). These stocks are Himax Technologies, Inc. (ADR) (NASDAQ:HIMX), First Solar, Inc. (NASDAQ:FSLR), SolarCity Corp (NASDAQ:SCTY), Cirrus Logic, Inc. (NASDAQ:CRUS), and SunPower Corporation (NASDAQ:SPWR). All of these stocks are in the semiconductor – specialized industry and their market caps match SLAB’s market cap.