iRobot Corporation (IRBT), Xcerra Corp (XCRA), Applied Micro Circuits Corporation (AMCC): SG Capital Management’s Top Q2 Picks

SG Capital Management, a fund led by Ken Grossman and Glen Schneider, filed today its Form 13F for the second quarter of 2014. In this document, the fund disclosed most of its long equity positions as of June 30, 2014. Its second quarter equity portfolio is mainly divided between services and technology stocks; each one of these sectors account for 34% of its total equity portfolio’s value –approximately $362 million.

Over the quarter, SG Capital purchased 40 new positions, increased its stakes in 10 of its preexisting holdings, and sold out 26 of them. Let’s take a look at some of its top picks in order to find out if any of them could be considered as potential investment options.

iRobot Corporation

The fund’s most valuable equity position is a newcomer in its portfolio: iRobot Corporation (NASDAQ:IRBT). This $1 billion market cap, robotics and artificial intelligence technologies developer saw SG Capital acquire 343,795 shares, valued at more than $14 million, over the second quarter. The fund’s stake at iRobot Corporation (NASDAQ:IRBT) accounts for almost 4% of its equity portfolio’s total value.

Other funds betting on iRobot Corporation (NASDAQ:IRBT) are Drew Cupps’ Cupps Capital Management, which last declared ownership of 564,583 shares, and George Soros’ Soros Fund Management, which started a position with 337,209 shares during the first quarter of the year.

Another company on which SG was bullish during the second quarter is Xcerra Corp (NASDAQ:XCRA), a $467 million market cap handling, contacting and measurements solutions manufacturer, formerly known as LTX-Credence Corporation. Over the quarter, the fund increased slightly its stake in Xcerra Corp (NASDAQ:XCRA), to 1.5 million shares, worth about $13.7 million.

Chuck Royce also seems to have confidence in Xcerra Corp (NASDAQ:XCRA); his fund owns 3.28 million shares of the company.

SG Capital also increased its bets on Applied Micro Circuits Corporation (NASDAQ:AMCC), an $804.7 million market cap global computing and connectivity solutions provider. The fund declared having almost quadrupled its exposure to Applied Micro Circuits Corporation (NASDAQ:AMCC), and now owns 1.16 million shares. This position, worth over $12.6 million, accounted for almost 3.5% of the fund’s equity portfolio.

Richard Driehaus also seems quite bullish about Applied Micro Circuits Corporation (NASDAQ:AMCC). His fund, Driehaus Capital, almost doubled its position during the first quarter (its last reported quarter), to 2.4 million shares.

Fourth in this list is Cynosure, Inc. (NASDAQ:CYNO), a $455 million market cap company that develops and markets aesthetic treatment systems that are used by physicians and other practitioners to perform non-invasive and minimally invasive procedures. Between March 31 and June 30, SG Capital added 561,972 shares to its holdings, and now owns 589,446 shares of Cynosure, Inc. (NASDAQ:CYNO), worth roughly $12.5 million.

Another major hedge fund betting on Cynosure, Inc. (NASDAQ:CYNO) is Neal C. Bradsher’s Broadwood Capital, which declared ownership of 817,029 shares as of the end of March.

Finally, there’s another newcomer at SG Capital’s portfolio: Air Methods Corp (NASDAQ:AIRM). This $2 billion market cap provider of air medical emergency transport services and systems saw the fund acquire 239,080 shares, worth about $12.3 million by the end of June.

Other funds with large positions in Air Methods Corp (NASDAQ:AIRM) are James E. Flynn’s Deerfield Management and Jim Simons’ Renaissance Technologies. Both these funds last disclosed ownership of more than half a million shares of Air Methods Corp (NASDAQ:AIRM).

Disclosure: Javier Hasse holds no position in any stocks mentioned

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