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Is ChipMOS Technologies Ltd (IMOS) A Good Stock To Buy?

The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30th. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards ChipMOS Technologies (Bermuda) Ltd (NASDAQ:IMOS).

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ChipMOS Technologies has seen a decrease in enthusiasm from smart money lately. At the end of this article, we will also compare ChipMOS Technologies to other stocks including Chuy’s Holdings Inc (NASDAQ:CHUY), Westwood Holdings Group, Inc. (NYSE:WHG), and Pengrowth Energy Corp (USA) (NYSE:PGH) to get a better sense of its popularity.

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According to most investors, hedge funds are assumed to be slow, old financial vehicles of years past. While there are greater than 8000 funds in operation at the moment, Experts at Insider Monkey, a website specializing in hedge funds, look at the aristocrats of this club, approximately 700 funds. These money managers administer the lion’s share of all hedge funds’ total asset base, and by keeping track of their unrivaled picks, Insider Monkey has brought to light numerous investment strategies that have historically beaten Mr. Market. Insider Monkey’s small-cap hedge fund strategy outrun the S&P 500 index by 12 percentage points per annum for a decade in their back tests.

Keeping this in mind, we’re going to take a glance at the fresh action surrounding ChipMOS Technologies.

What have hedge funds been doing with ChipMOS Technologies (Bermuda) Ltd (NASDAQ:IMOS)?

Heading into Q4, a total of 18 of the hedge funds tracked by Insider Monkey were bullish in this stock, a decline of 14% from the second quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes substantially.

When looking at the hedgies followed by Insider Monkey, Baupost Group, managed by Seth Klarman, holds the number one position in ChipMOS Technologies (Bermuda) Ltd (NASDAQ:IMOS). Value investor Baupost Group has a $61.6 million position in the stock, comprising 1% of its 13F portfolio. On Baupost Group’s heels is Soros Fund Management, managed by billionaire George Soros, which held a $23.4 million position; the family office has 0.4% of its 13F portfolio invested in the stock. Remaining peers that are bullish encompass Jim Simons’ Renaissance Technologies, Israel Englander’s Millennium Management and Bernard Lambilliotte’s Ecofin Ltd.

Because ChipMOS Technologies has faced a declination in interest from hedge fund managers, it’s easy to see that there is a sect of hedgies that elected to cut their positions entirely in third quarter. Interestingly, Dmitry Balyasny’s Balyasny Asset Management said goodbye to the biggest position of the “upper crust” of funds watched by Insider Monkey, totaling close to $16 million in stock. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 3 funds in third quarter.

Let’s also take a look at hedge fund activity in other stocks similar to ChipMOS Technologies (Bermuda) Ltd (NASDAQ:IMOS). These stocks are Chuy’s Holdings Inc (NASDAQ:CHUY), Westwood Holdings Group, Inc. (NYSE:WHG), Pengrowth Energy Corp (USA) (NYSE:PGH), and Anika Therapeutics, Inc. (NASDAQ:ANIK). This group of stocks’ market valuations are similar to ChipMOS Technologies (Bermuda) Ltd (NASDAQ:IMOS)’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CHUY 18 59520 7
WHG 5 85376 -1
PGH 6 3665 1
ANIK 13 54008 3

As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $51 million. Chuy’s Holdings Inc (NASDAQ:CHUY) is the most popular stock in this table. On the other hand Westwood Holdings Group, Inc. (NYSE:WHG) is the least popular one with only 5 bullish hedge fund positions. ChipMOS Technologies (Bermuda) Ltd (NASDAQ:IMOS) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds love the most. In this regard Chuy’s Holdings Inc (NASDAQ:CHUY) might be a better candidate to consider a long position.

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