Power One Inc (NASDAQ:PWER) was in 12 hedge funds’ portfolio at the end of December. PWER investors should pay attention to a decrease in hedge fund interest of late. There were 12 hedge funds in our database with PWER positions at the end of the previous quarter.
According to most shareholders, hedge funds are viewed as slow, outdated investment vehicles of yesteryear. While there are over 8000 funds in operation at the moment, we at Insider Monkey choose to focus on the elite of this group, around 450 funds. It is estimated that this group oversees most of all hedge funds’ total capital, and by keeping an eye on their best stock picks, we have figured out a number of investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).
Equally as key, optimistic insider trading sentiment is a second way to parse down the stock market universe. As the old adage goes: there are plenty of reasons for a bullish insider to sell shares of his or her company, but just one, very simple reason why they would behave bullishly. Various academic studies have demonstrated the useful potential of this strategy if piggybackers know what to do (learn more here).
Keeping this in mind, we’re going to take a glance at the recent action regarding Power One Inc (NASDAQ:PWER).
What does the smart money think about Power One Inc (NASDAQ:PWER)?
Heading into 2013, a total of 12 of the hedge funds we track were bullish in this stock, a change of 0% from the third quarter. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings substantially.
When looking at the hedgies we track, Cliff Asness’s AQR Capital Management had the biggest position in Power One Inc (NASDAQ:PWER), worth close to $5 million, comprising 0% of its total 13F portfolio. On AQR Capital Management’s heels is Highbridge Capital Management, managed by Glenn Russell Dubin, which held a $4 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedgies that hold long positions include Joel Greenblatt’s Gotham Asset Management, Philip Hempleman’s Ardsley Partners and Israel Englander’s Millennium Management.
Seeing as Power One Inc (NASDAQ:PWER) has faced declining sentiment from hedge fund managers, we can see that there exists a select few funds who were dropping their full holdings heading into 2013. Intriguingly, D. E. Shaw’s D E Shaw dumped the biggest investment of all the hedgies we monitor, comprising about $2 million in stock., and Mike Vranos of Ellington was right behind this move, as the fund sold off about $1 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
How have insiders been trading Power One Inc (NASDAQ:PWER)?
Bullish insider trading is particularly usable when the company in question has experienced transactions within the past 180 days. Over the last 180-day time frame, Power One Inc (NASDAQ:PWER) has experienced zero unique insiders buying, 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 Power One Inc (NASDAQ:PWER). These stocks are Advanced Energy Industries, Inc. (NASDAQ:AEIS), Silicon Motion Technology Corp. (ADR) (NASDAQ:SIMO), Nam Tai Electronics, Inc. (NYSE:NTE), Orbotech Ltd. (NASDAQ:ORBK), and Methode Electronics Inc. (NYSE:MEI). This group of stocks are in the diversified electronics industry and their market caps are similar to PWER’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Advanced Energy Industries, Inc. (NASDAQ:AEIS)||13||0||3|
|Silicon Motion Technology Corp. (ADR) (NASDAQ:SIMO)||7||0||0|
|Nam Tai Electronics, Inc. (NYSE:NTE)||9||0||0|
|Orbotech Ltd. (NASDAQ:ORBK)||6||0||0|
|Methode Electronics Inc. (NYSE:MEI)||6||3||0|
With the results exhibited by the aforementioned studies, everyday investors should always keep an eye on hedge fund and insider trading activity, and Power One Inc (NASDAQ:PWER) applies perfectly to this mantra.