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Is Kulicke and Soffa Industries Inc. (KLIC) Going to Burn These Hedge Funds?

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To many traders, hedge funds are viewed as bloated, old financial vehicles of an era lost to time. Although there are In excess of 8,000 hedge funds with their doors open in present day, this site looks at the elite of this club, about 525 funds. It is widely held that this group has its hands on the lion’s share of all hedge funds’ total capital, and by tracking their best picks, we’ve formulated a few investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per 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 beaten the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).

Just as necessary, optimistic insider trading sentiment is another way to analyze the world of equities. There are a number of stimuli for an upper level exec to downsize shares of his or her company, but only one, very simple reason why they would buy. Many academic studies have demonstrated the valuable potential of this strategy if piggybackers understand where to look (learn more here).

Keeping this in mind, let’s analyze the latest info about Kulicke and Soffa Industries Inc. (NASDAQ:KLIC).

What does the smart money think about Kulicke and Soffa Industries Inc. (NASDAQ:KLIC)?

In preparation for the third quarter, a total of 18 of the hedge funds we track were bullish in this stock, a change of -25% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their holdings significantly.

Kulicke and Soffa Industries Inc. (NASDAQ:KLIC)According to our 13F database, Renaissance Technologies, managed by Jim Simons, holds the most valuable position in Kulicke and Soffa Industries Inc. (NASDAQ:KLIC). Renaissance Technologies has a $28 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Royce & Associates, managed by Chuck Royce, which held a $15.6 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedge funds with similar optimism include Clint Carlson’s Carlson Capital, David Dreman’s Dreman Value Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Since Kulicke and Soffa Industries Inc. (NASDAQ:KLIC) has experienced declining interest from the top-tier hedge fund industry, we can see that there exists a select few hedge funds who were dropping their positions entirely in Q1. It’s worth mentioning that Clint Coghill’s Coghill Capital Management dropped the biggest position of the “upper crust” of funds we monitor, totaling close to $12.3 million in stock. Brett Hendrickson’s fund, Nokomis Capital, also cut its stock, about $7.1 million worth. These moves are interesting, as total hedge fund interest dropped by 6 funds in Q1.

What do corporate executives and insiders think about Kulicke and Soffa Industries Inc. (NASDAQ:KLIC)?

Bullish insider trading is particularly usable when the company we’re looking at has seen transactions within the past half-year. Over the latest six-month time period, Kulicke and Soffa Industries Inc. (NASDAQ:KLIC) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also examine the relationship between both of these indicators in other stocks similar to Kulicke and Soffa Industries Inc. (NASDAQ:KLIC). These stocks are Entegris Inc (NASDAQ:ENTG), Brooks Automation, Inc. (USA) (NASDAQ:BRKS), Ultratech, Inc. (NASDAQ:UTEK), ATMI Inc (NASDAQ:ATMI), and Tessera Technologies, Inc. (NASDAQ:TSRA). This group of stocks belong to the semiconductor equipment & materials industry and their market caps match KLIC’s market cap.

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