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Is Molex Incorporated (MOLX) Going to Burn These Hedge Funds?: AVX Corporation (AVX), Amphenol Corporation (APH)

Is Molex Incorporated (NASDAQ:MOLX) worth your attention right now? The best stock pickers are becoming more confident. The number of bullish hedge fund bets improved by 6 recently.

Molex Incorporated (NASDAQ:MOLX)To most stock holders, hedge funds are seen as underperforming, outdated investment vehicles of the past. While there are greater than 8000 funds in operation at present, we at Insider Monkey look at the masters of this group, about 450 funds. Most estimates calculate that this group controls the lion’s share of all hedge funds’ total asset base, and by watching their top stock picks, we have found a number of investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).

Just as integral, positive insider trading sentiment is a second way to parse down the stock market universe. As the old adage goes: there are a variety of motivations for an insider to downsize shares of his or her company, but just one, very clear reason why they would initiate a purchase. Many academic studies have demonstrated the market-beating potential of this tactic if you understand where to look (learn more here).

Keeping this in mind, let’s take a look at the latest action encompassing Molex Incorporated (NASDAQ:MOLX).

How are hedge funds trading Molex Incorporated (NASDAQ:MOLX)?

At the end of the fourth quarter, a total of 16 of the hedge funds we track were bullish in this stock, a change of 60% from the third quarter. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were increasing their holdings considerably.

Of the funds we track, Greenhaven Associates, managed by Edgar Wachenheim, holds the biggest position in Molex Incorporated (NASDAQ:MOLX). Greenhaven Associates has a $36 million position in the stock, comprising 1.1% of its 13F portfolio. On Greenhaven Associates’s heels is Winton Capital Management, managed by David Harding, which held a $19 million position; 0% of its 13F portfolio is allocated to the company. Some other hedgies with similar optimism include Jim Simons’s Renaissance Technologies, Chuck Royce’s Royce & Associates and Steven Cohen’s SAC Capital Advisors.

As industrywide interest jumped, specific money managers were leading the bulls’ herd. SAC Capital Advisors, managed by Steven Cohen, initiated the most outsized position in Molex Incorporated (NASDAQ:MOLX). SAC Capital Advisors had 4 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also made a $1 million investment in the stock during the quarter. The other funds with new positions in the stock are John Overdeck and David Siegel’s Two Sigma Advisors, D. E. Shaw’s D E Shaw, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

How are insiders trading Molex Incorporated (NASDAQ:MOLX)?

Insider buying is at its handiest when the primary stock in question has experienced transactions within the past six months. Over the latest six-month time frame, Molex Incorporated (NASDAQ:MOLX) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Molex Incorporated (NASDAQ:MOLX). These stocks are AVX Corporation (NYSE:AVX), Amphenol Corporation (NYSE:APH), LG Display Co Ltd. (ADR) (NYSE:LPL), Acuity Brands, Inc. (NYSE:AYI), and Dolby Laboratories, Inc. (NYSE:DLB). This group of stocks are in the diversified electronics industry and their market caps resemble MOLX’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
AVX Corporation (NYSE:AVX) 16 0 1
Amphenol Corporation (NYSE:APH) 16 0 13
LG Display Co Ltd. (ADR) (NYSE:LPL) 9 0 0
Acuity Brands, Inc. (NYSE:AYI) 16 0 6
Dolby Laboratories, Inc. (NYSE:DLB) 13 0 7

With the results exhibited by the aforementioned research, everyday investors must always pay attention to hedge fund and insider trading sentiment, and Molex Incorporated (NASDAQ:MOLX) is no exception.

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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.

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