United Microelectronics Corp (ADR) (NYSE:UMC) has experienced a decrease in hedge fund sentiment lately.
To most market participants, hedge funds are seen as unimportant, outdated investment tools of the past. While there are more than 8000 funds in operation at the moment, we at Insider Monkey hone in on the aristocrats of this group, around 450 funds. Most estimates calculate that this group controls the majority of the hedge fund industry’s total asset base, and by paying attention to their highest performing stock picks, we have uncovered a number of investment strategies that have historically beaten 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 outclassed the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).
Equally as integral, optimistic insider trading activity is a second way to break down the investments you’re interested in. As the old adage goes: there are many motivations for an insider to get rid of shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Several empirical studies have demonstrated the valuable potential of this tactic if piggybackers understand where to look (learn more here).
Consequently, it’s important to take a peek at the recent action surrounding United Microelectronics Corp (ADR) (NYSE:UMC).
Hedge fund activity in United Microelectronics Corp (ADR) (NYSE:UMC)
At the end of the fourth quarter, a total of 12 of the hedge funds we track were long in this stock, a change of 0% from one quarter earlier. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their holdings significantly.
According to our comprehensive database, Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, holds the most valuable position in United Microelectronics Corp (ADR) (NYSE:UMC). Arrowstreet Capital has a $12 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Daniel S. Och of OZ Management, with a $5 million position; 0.4% of its 13F portfolio is allocated to the stock. Other peers with similar optimism include Howard Marks’s Oaktree Capital Management, Michael Hintze’s CQS Cayman LP and Jim Simons’s Renaissance Technologies.
Seeing as United Microelectronics Corp (ADR) (NYSE:UMC) has faced a declination in interest from the entirety of the hedge funds we track, it’s safe to say that there exists a select few funds that decided to sell off their positions entirely in Q4. It’s worth mentioning that Steve Shapiro’s Intrepid Capital Management Inc DE sold off the largest position of the “upper crust” of funds we key on, totaling close to $1 million in stock., and Thomas Bailard of Bailard Inc was right behind this move, as the fund cut about $1 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Insider trading activity in United Microelectronics Corp (ADR) (NYSE:UMC)
Insider purchases made by high-level executives is particularly usable when the company in question has experienced transactions within the past six months. Over the last six-month time frame, United Microelectronics Corp (ADR) (NYSE:UMC) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to United Microelectronics Corp (ADR) (NYSE:UMC). These stocks are Lam Research Corporation (NASDAQ:LRCX), Cree, Inc. (NASDAQ:CREE), Advanced Semiconductor Engineering (ADR) (NYSE:ASX), Siliconware Precision Industries (ADR) (NASDAQ:SPIL), and Synopsys, Inc. (NASDAQ:SNPS). This group of stocks are in the semiconductor equipment & materials industry and their market caps resemble UMC’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Lam Research Corporation (NASDAQ:LRCX)||20||0||1|
|Cree, Inc. (NASDAQ:CREE)||16||1||2|
|Advanced Semiconductor Engineering (ADR) (NYSE:ASX)||8||0||0|
|Siliconware Precision Industries (ADR) (NASDAQ:SPIL)||8||0||0|
|Synopsys, Inc. (NASDAQ:SNPS)||16||0||11|
With the returns demonstrated by Insider Monkey’s time-tested strategies, everyday investors should always keep an eye on hedge fund and insider trading activity, and United Microelectronics Corp (ADR) (NYSE:UMC) is an important part of this process.
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