Plug Power Inc (NASDAQ:PLUG) and Himax Technologies, Inc. (ADR) (NASDAQ:HIMX) are notable movers in mid-day trading today, the former soaring on record revenues, while the latter is being buoyed by an analyst rating upgrade. Plug Power Inc (NASDAQ:PLUG) soared by as much as 16.59% to $2.60 per share compared to its closing price of $2.23 per share yesterday as the firm reported record revenues for the second quarter, while not disclosing exact figures. It also said it is on track to reach its target of $100 million in revenue for fiscal year 2015, a target which seemed overly lofty considering it only reported $9.4 million in revenue for the first quarter of the year. The firm said it shipped 888 units of its GenDrive fuel cell between April and June, an increase from the 419 units it shipped during the preceding quarter and the 687 units it shipped in the year-ago quarter. Year-to-date, the stock has plunged by 20.48% while within the last 12 months, it’s down by 44.62%.
Meanwhile, Himax Technologies, Inc. (ADR) (NASDAQ:HIMX) received a rating upgrade from Chardan Capital Markets today, revising its rating to “Buy” from a previous rating of “Sell”. Chardan Capital Markets also raised its price target on Himax Technologies stock to $13 from $4, as the analyst firm has had a clear change of heart concerning the prospects of the company. In its note, the analyst firm said that channel checks reveal that Himax Technologies is supplying twice as much liquid crystal on silicon microdisplays to Microsoft for its HoloLens augmented reality headset compared to Google with its Glass project. Chardan Capital Markets also said that it believes Microsoft will make HoloLens available later this July. Unlike Plug Power, Himax Technologies’ stock has climbed by 3.94% year-to-date, and 27.42% in the last 12 months.
Hedge funds however have not been very positive in their assessments of the worth of these companies. At the end of March, a total of five of the hedge funds tracked by Insider Monkey held long positions in Plug Power, a 44% decrease from the end of the fourth quarter. The value of their holdings also plunged, even more than the number of funds with long positions in the stock. Aggregate value of holdings dove 75.43% to $1.98 million by the end of the first quarter from $8.05 million the quarter earlier, a significant drop since the stock only decreased in value by 13.67% in the first quarter. Meanwhile, a total of ten of the hedge funds tracked by Insider Monkey were long in Himax Technologies at the end of the first quarter, a decrease of 29% from the previous quarter. The total value of holdings held by the smart money also decreased by 59.15% to $26.9 million by the end of March from $65.86 million three months earlier. This decline is also far larger than the stock’s slump of 21.46% in the first quarter.
We follow hedge funds because our research has shown that their stock picks historically managed to generate alpha even though the filings are up to 45-days delayed. We used a 60-day delay in our back tests to be on the safe side and our research showed that the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Total Return Index by an average of 95 basis points per month between 1999 and 2012. After adjusting for risk, our calculations revealed that these stocks’ monthly alpha was 80 basis points. We have also been sharing and tracking the performance of these stocks since the end of August 2012, during which time they have returned 135%, outperforming the S&P 500 ETF by nearly 80 percentage points (see more details here).
Furthermore, Insider Monkey also studies if insiders of companies are buying or selling their companies’ shares. For Plug Power, no purchases were made by insiders this year while Air Liquide Investissements d’Avenir et de Demonstration SA, which has a director seat in the firm, had sold 9,101 shares of the firm by the end of March. There were no recorded sales or purchases of shares by insiders of Himax Technologies this year. With all of this in mind, we’re going to check out the key action regarding Plug Power Inc and Himax Technologies, Inc.
What have hedge funds been doing with Plug Power Inc (NASDAQ:PLUG) and Himax Technologies, Inc. (ADR) (NASDAQ:HIMX)?
According to hedge fund intelligence website Insider Monkey, D.E. Shaw & Co., L.P., managed by David E. Shaw, holds the largest position in Plug Power Inc (NASDAQ:PLUG). The firm has an $854,000 position in the stock held in 329,570 shares, comprising less than 0.1% of its 13F portfolio. Coming in second is Joseph A. Jolson of Harvest Capital Strategies, with a $518,000 position in 200,000 shares; the fund has less than 0.1% of its 13F portfolio invested in the stock as well. Some other members of the smart money that are bullish comprise Ken Griffin’s Citadel Investment Group, and Cliff Asness’ AQR Capital Management. It’s worth mentioning that William C. Martin‘s Raging Capital Management cut the largest stake of the 700 funds tracked by Insider Monkey, totaling over $5.0 million in stock.
Polar Capital, managed by Brian Ashford-Russell and Tim Woolley, holds the number one position in Himax Technologies, Inc. (ADR) (NASDAQ:HIMX). Polar Capital has a $10.6 million position in the stock comprised of 1.68 million shares, making up 0.2% of its 13F portfolio. Coming in second is Millennium Management, managed by Israel Englander, which held a $5.3 million position of 844,667 shares; the fund has less than 0.1% of its 13F portfolio invested in the stock. Some other members of the smart money that are bullish consist of David E. Shaw’s D.E. Shaw & Co., L.P., Jim Simons’ Renaissance Technologies, and Matthew Hulsizer’s PEAK6 Capital Management. At the top of the heap among those that dumped Himax shares in the first quarter, Dmitry Balyasny‘s Balyasny Asset Management cut the biggest stake of all the hedgies watched by Insider Monkey, dumping 2.95 million shares valued at an estimated $23.8 million in stock. Josh Resnick’s fund, Jericho Capital Asset Management, also dumped its holding of 1.23 million shares worth about $9.9 million.
Because of the substantial decrease in smart money ownership among funds, we don’t think going long in Plug Power Inc (NASDAQ:PLUG) or Himax Technologies, Inc. (ADR) (NASDAQ:HIMX) is a good idea at this time.
Disclosure: None
