Is GSI Technology, Inc. (NASDAQ:GSIT) the right pick for your portfolio? The best stock pickers are reducing their bets on the stock. The number of long hedge fund bets fell by 1 lately.
To most stock holders, hedge funds are viewed as unimportant, old financial tools of years past. While there are greater than 8000 funds with their doors open at present, we at Insider Monkey hone in on the leaders of this club, close to 450 funds. Most estimates calculate that this group has its hands on the majority of the smart money’s total asset base, and by tracking their best picks, we have spotted a few investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy beat 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 outperformed the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Equally as key, positive insider trading sentiment is a second way to parse down the financial markets. As the old adage goes: there are a variety of stimuli for an upper level exec to cut shares of his or her company, but only one, very simple reason why they would buy. Several academic studies have demonstrated the market-beating potential of this method if “monkeys” know where to look (learn more here).
With all of this in mind, let’s take a peek at the latest action encompassing GSI Technology, Inc. (NASDAQ:GSIT).
What have hedge funds been doing with GSI Technology, Inc. (NASDAQ:GSIT)?
In preparation for this quarter, a total of 7 of the hedge funds we track held long positions in this stock, a change of -13% from the previous quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes substantially.
Of the funds we track, Chuck Royce’s Royce & Associates had the biggest position in GSI Technology, Inc. (NASDAQ:GSIT), worth close to $14 million, accounting for less than 0.1%% of its total 13F portfolio. Coming in second is Millennium Management, managed by Israel Englander, which held a $6.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers with similar optimism include Peter S. Park’s Park West Asset Management, Jim Simons’s Renaissance Technologies and Kelly Cardwell’s Central Square Management.
Due to the fact that GSI Technology, Inc. (NASDAQ:GSIT) has faced a declination in interest from the entirety of the hedge funds we track, logic holds that there exists a select few money managers that elected to cut their full holdings last quarter. At the top of the heap, Cliff Asness’s AQR Capital Management sold off the biggest stake of all the hedgies we watch, totaling an estimated $0.1 million in stock. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds last quarter.
What do corporate executives and insiders think about GSI Technology, Inc. (NASDAQ:GSIT)?
Bullish insider trading is best served when the company in focus has seen transactions within the past 180 days. Over the last six-month time frame, GSI Technology, Inc. (NASDAQ:GSIT) has experienced zero unique insiders buying, and 1 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to GSI Technology, Inc. (NASDAQ:GSIT). These stocks are FormFactor, Inc. (NASDAQ:FORM), Kopin Corporation (NASDAQ:KOPN), API Technologies Corp (NASDAQ:ATNY), LDK Solar Co., Ltd (ADR) (NYSE:LDK), and NeoPhotonics Corp (NYSE:NPTN). All of these stocks are in the semiconductor – broad line industry and their market caps resemble GSIT’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| FormFactor, Inc. (NASDAQ:FORM) | 18 | 0 | 3 |
| Kopin Corporation (NASDAQ:KOPN) | 9 | 1 | 0 |
| API Technologies Corp (NASDAQ:ATNY) | 6 | 2 | 2 |
| LDK Solar Co., Ltd (ADR) (NYSE:LDK) | 4 | 0 | 0 |
| NeoPhotonics Corp (NYSE:NPTN) | 6 | 0 | 0 |
With the returns exhibited by our research, retail investors should always watch hedge fund and insider trading activity, and GSI Technology, Inc. (NASDAQ:GSIT) applies perfectly to this mantra.
