Cavium Inc (NASDAQ:CAVM) investors should be aware of a decrease in hedge fund interest recently.
In today’s marketplace, there are plenty of metrics investors can use to watch their holdings. A pair of the most innovative are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top money managers can beat the S&P 500 by a significant amount (see just how much).
Equally as beneficial, optimistic insider trading sentiment is a second way to break down the stock market universe. Just as you’d expect, there are a number of incentives for an insider to sell shares of his or her company, but just one, very simple reason why they would buy. Several academic studies have demonstrated the useful potential of this method if piggybackers understand where to look (learn more here).
With all of this in mind, let’s take a look at the latest action surrounding Cavium Inc (NASDAQ:CAVM).
How are hedge funds trading Cavium Inc (NASDAQ:CAVM)?
In preparation for this quarter, a total of 15 of the hedge funds we track were bullish in this stock, a change of -25% from the first quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes significantly.
Of the funds we track, Dorsal Capital Management, managed by Ryan Frick and Oliver Evans, holds the biggest position in Cavium Inc (NASDAQ:CAVM). Dorsal Capital Management has a $29.1 million position in the stock, comprising 4% of its 13F portfolio. Sitting at the No. 2 spot is Donald Chiboucis of Columbus Circle Investors, with a $17 million position; 0.1% of its 13F portfolio is allocated to the company. Other hedge funds that are bullish include Drew Cupps’s Cupps Capital Management, and Van Schreiber’s Bennett Lawrence Management.
Judging by the fact that Cavium Inc (NASDAQ:CAVM) has faced a declination in interest from the aggregate hedge fund industry, it’s easy to see that there were a few fund managers that decided to sell off their full holdings in Q1. Intriguingly, Steven Cohen’s SAC Capital Advisors said goodbye to the biggest stake of the 450+ funds we watch, valued at an estimated $22.8 million in stock., and John Hurley of Cavalry Asset Management was right behind this move, as the fund dropped about $11.9 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 5 funds in Q1.
What do corporate executives and insiders think about Cavium Inc (NASDAQ:CAVM)?
Insider purchases made by high-level executives is best served when the company we’re looking at has seen transactions within the past half-year. Over the last 180-day time period, Cavium Inc (NASDAQ:CAVM) has seen zero unique insiders buying, and 3 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Cavium Inc (NASDAQ:CAVM). These stocks are Atmel Corporation (NASDAQ:ATML), Cypress Semiconductor Corporation (NASDAQ:CY), Mellanox Technologies, Ltd. (NASDAQ:MLNX), Advanced Micro Devices, Inc. (NYSE:AMD), and Vishay Intertechnology (NYSE:VSH). This group of stocks are the members of the semiconductor – broad line industry and their market caps resemble CAVM’s market cap.