Inphi Corporation (NYSE:IPHI) investors should pay attention to a decrease in hedge fund sentiment lately.
If you’d ask most traders, hedge funds are seen as worthless, old financial tools of the past. While there are greater than 8000 funds trading at present, we at Insider Monkey choose to focus on the bigwigs of this club, around 450 funds. Most estimates calculate that this group has its hands on most of the smart money’s total asset base, and by tracking their top picks, we have determined a few investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year 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 outclassed the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Equally as important, positive insider trading sentiment is a second way to parse down the stock market universe. As the old adage goes: there are many reasons 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 useful potential of this method if investors understand what to do (learn more here).
With all of this in mind, we’re going to take a look at the latest action encompassing Inphi Corporation (NYSE:IPHI).
What have hedge funds been doing with Inphi Corporation (NYSE:IPHI)?
At Q1’s end, a total of 7 of the hedge funds we track held long positions in this stock, a change of -36% from one quarter earlier. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes substantially.
Of the funds we track, Citadel Investment Group, managed by Ken Griffin, holds the biggest position in Inphi Corporation (NYSE:IPHI). Citadel Investment Group has a $12.5 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Citadel Investment Group’s heels is Brian Ashford-Russell and Tim Woolley of Polar Capital, with a $3.4 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions include Chuck Royce’s Royce & Associates, Jim Simons’s Renaissance Technologies and D. E. Shaw’s D E Shaw.
Due to the fact that Inphi Corporation (NYSE:IPHI) has experienced a declination in interest from the aggregate hedge fund industry, it’s easy to see that there exists a select few fund managers who sold off their full holdings in Q1. It’s worth mentioning that Gregory A. Weaver’s Invicta Capital Management said goodbye to the largest stake of the “upper crust” of funds we watch, totaling close to $10.5 million in stock., and Ian P. Murray of Lanexa Global Management was right behind this move, as the fund said goodbye to about $2.6 million worth. These moves are important to note, as total hedge fund interest was cut by 4 funds in Q1.
What do corporate executives and insiders think about Inphi Corporation (NYSE:IPHI)?
Insider purchases made by high-level executives is particularly usable when the primary stock in question has experienced transactions within the past half-year. Over the last 180-day time frame, Inphi Corporation (NYSE:IPHI) has experienced 3 unique insiders purchasing, 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 Inphi Corporation (NYSE:IPHI). These stocks are GSI Technology, Inc. (NASDAQ:GSIT), Silicon Image, Inc. (NASDAQ:SIMG), Kopin Corporation (NASDAQ:KOPN), FormFactor, Inc. (NASDAQ:FORM), and Entropic Communications, Inc. (NASDAQ:ENTR). All of these stocks are in the semiconductor – broad line industry and their market caps resemble IPHI’s market cap.