Is Power Integrations Inc (NASDAQ:POWI) a first-rate stock to buy now? Hedge funds are getting less bullish. The number of long hedge fund bets fell by 3 lately.
In the 21st century investor’s toolkit, there are dozens of metrics shareholders can use to track their holdings. Some of the most useful are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top hedge fund managers can beat the broader indices by a superb margin (see just how much).
Equally as important, positive insider trading sentiment is a second way to parse down the marketplace. Just as you'd expect, there are a number of reasons for a corporate insider to get rid of shares of his or her company, but just one, very obvious reason why they would behave bullishly. Several academic studies have demonstrated the valuable potential of this method if piggybackers understand where to look (learn more here).
Now, it's important to take a gander at the key action encompassing Power Integrations Inc (NASDAQ:POWI).
At the end of the first quarter, a total of 5 of the hedge funds we track held long positions in this stock, a change of -38% from one quarter earlier. With hedge funds' positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their stakes meaningfully.
When looking at the hedgies we track, Jim Simons's Renaissance Technologies had the biggest position in Power Integrations Inc (NASDAQ:POWI), worth close to $5.7 million, accounting for less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Chuck Royce of Royce & Associates, with a $2.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include Ken Griffin's Citadel Investment Group, John Overdeck and David Siegel's Two Sigma Advisors and Israel Englander's Millennium Management.
Judging by the fact that Power Integrations Inc (NASDAQ:POWI) has experienced declining sentiment from the aggregate hedge fund industry, it's safe to say that there was a specific group of funds who were dropping their full holdings at the end of the first quarter. At the top of the heap, Ian Simm's Impax Asset Management sold off the largest investment of all the hedgies we watch, worth about $23.8 million in stock., and Ken Grossman and Glen Schneider of SG Capital Management was right behind this move, as the fund cut about $6 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 3 funds at the end of the first quarter.
Insider purchases made by high-level executives is most useful when the company we're looking at has experienced transactions within the past six months. Over the last half-year time period, Power Integrations Inc (NASDAQ:POWI) has experienced zero unique insiders buying, and 10 insider sales (see the details of insider trades here).
Let's also review hedge fund and insider activity in other stocks similar to Power Integrations Inc (NASDAQ:POWI). These stocks are MEMC Electronic Materials, Inc. (NYSE:WFR), RF Micro Devices, Inc. (NASDAQ:RFMD), QLogic Corporation (NASDAQ:QLGC), International Rectifier Corporation (NYSE:IRF), and PMC-Sierra Inc (NASDAQ:PMCS). This group of stocks are in the semiconductor - integrated circuits industry and their market caps are closest to POWI's market cap.