KLA-Tencor Corporation (NASDAQ:KLAC) shareholders have witnessed a decrease in hedge fund interest in recent months.
In the financial world, there are many methods shareholders can use to track the equity markets. A pair of the best are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite investment managers can trounce the broader indices by a superb margin (see just how much).
Equally as beneficial, optimistic insider trading activity is another way to break down the stock market universe. As the old adage goes: there are lots of incentives for an insider to cut shares of his or her company, but just one, very obvious reason why they would buy. Various empirical studies have demonstrated the valuable potential of this tactic if shareholders know where to look (learn more here).
Keeping this in mind, let's take a gander at the recent action regarding KLA-Tencor Corporation (NASDAQ:KLAC).
In preparation for this year, a total of 23 of the hedge funds we track were long in this stock, a change of 0% from the previous quarter. With hedge funds' positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their stakes considerably.
Of the funds we track, Jim Simons's Renaissance Technologies had the largest position in KLA-Tencor Corporation (NASDAQ:KLAC), worth close to $110 million, accounting for 0.3% of its total 13F portfolio. The second largest stake is held by First Eagle Investment Management, managed by Jean-Marie Eveillard, which held a $86 million position; 0.1% of its 13F portfolio is allocated to the company. Other hedge funds that are bullish include Ken Griffin's Citadel Investment Group, Cliff Asness's AQR Capital Management and Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital.
Due to the fact that KLA-Tencor Corporation (NASDAQ:KLAC) has witnessed bearish sentiment from the aggregate hedge fund industry, logic holds that there is a sect of fund managers that decided to sell off their entire stakes heading into 2013. At the top of the heap, Steven Cohen's SAC Capital Advisors dumped the largest position of all the hedgies we key on, totaling about $4 million in call options, and Paul Tudor Jones of Tudor Investment Corp was right behind this move, as the fund sold off about $1 million worth. These transactions are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Insider purchases made by high-level executives is particularly usable when the company in question has seen transactions within the past half-year. Over the last half-year time frame, KLA-Tencor Corporation (NASDAQ:KLAC) has seen zero unique insiders buying, and 8 insider sales (see the details of insider trades here).
With the returns exhibited by our time-tested strategies, everyday investors should always monitor hedge fund and insider trading activity, and KLA-Tencor Corporation (NASDAQ:KLAC) is an important part of this process.
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