Silicon Graphics International Corp (NASDAQ:SGI) investors should be aware of a decrease in activity from the world’s largest hedge funds lately. Let’s take a look at what the smart money thinks in greater detail, and we’ll also walk through the competition, including likes of Hewlett-Packard Company (NYSE:HPQ) and International Business Machines Corp. (NYSE:IBM).
According to most investors, hedge funds are perceived as unimportant, old financial vehicles of yesteryear. While there are over 8000 funds with their doors open at present, we choose to focus on the aristocrats of this group, around 450 funds. It is widely believed that this group controls the majority of the hedge fund industry’s total capital, and by paying attention to their best picks, we have identified a number of investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy beat 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 outpaced the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).
Just as key, positive insider trading sentiment is a second way to break down the financial markets. Obviously, there are a number of stimuli for an upper level exec to downsize shares of his or her company, but just one, very simple reason why they would initiate a purchase. Many academic studies have demonstrated the useful potential of this tactic if piggybackers know what to do (learn more here).
With these “truths” under our belt, we’re going to take a glance at the latest action encompassing Silicon Graphics International Corp (NASDAQ:SGI).
What have hedge funds been doing with Silicon Graphics International Corp (NASDAQ:SGI)?
At the end of the fourth quarter, a total of 7 of the hedge funds we track were bullish in this stock, a change of -13% from the third quarter. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their holdings considerably.
Of the funds we track, Phil Frohlich’s Prescott Group Capital Management had the most valuable position in Silicon Graphics International Corp (NASDAQ:SGI), worth close to $21 million, comprising 5.5% of its total 13F portfolio. Sitting at the No. 2 spot is Harvest Capital Strategies, managed by Joseph A. Jolson, which held a $3 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include Ken Griffin’s Citadel Investment Group, Israel Englander’s Millennium Management and D. E. Shaw’s D E Shaw.
Seeing as Silicon Graphics International Corp (NASDAQ:SGI) has experienced falling interest from the entirety of the hedge funds we track, we can see that there was a specific group of hedgies that elected to cut their entire stakes in Q4. Intriguingly, John Burbank’s Passport Capital said goodbye to the biggest position of the “upper crust” of funds we track, comprising an estimated $0 million in stock. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds in Q4.
How are insiders trading Silicon Graphics International Corp (NASDAQ:SGI)?
Bullish insider trading is at its handiest when the primary stock in question has seen transactions within the past 180 days. Over the last half-year time frame, Silicon Graphics International Corp (NASDAQ:SGI) has experienced 1 unique insiders buying, and 3 insider sales (see the details of insider trades here).
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Cray Inc. (NASDAQ:CRAY)||17||0||7|
|Teradata Corporation (NYSE:TDC)||22||0||4|
|Hewlett-Packard Company (NYSE:HPQ)||47||0||0|
|International Business Machines Corp. (NYSE:IBM)||47||0||17|
With the returns demonstrated by the aforementioned studies, everyday investors should always watch hedge fund and insider trading activity, and Silicon Graphics International Corp (NASDAQ:SGI) is an important part of this process.
Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.