How do you pick the next stock to invest in? One way would be to spend hours of research browsing through thousands of publicly traded companies. However, an easier way is to look at the stocks that smart money investors are collectively bullish on. Hedge funds and other institutional investors usually invest large amounts of capital and have to conduct due diligence while choosing their next pick. They don’t always get it right, but, on average, their stock picks historically generated strong returns after adjusting for known risk factors. With this in mind, let’s take a look at the recent hedge fund activity surrounding Sigma Designs Inc (NASDAQ:SIGM).
Is Sigma Designs Inc going to take off soon? Prominent investors are becoming more confident. The number of bullish hedge fund positions increased by 2 in recent months. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as RadNet Inc. (NASDAQ:RDNT), Kandi Technolgies Corp. (NASDAQ:KNDI), and Natural Gas Services Group, Inc. (NYSE:NGS) to gather more data points.
Follow Sigma Designs Inc (NASDAQ:SIGM)
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Keeping this in mind, we’re going to take a look at the key action encompassing Sigma Designs Inc (NASDAQ:SIGM).
Hedge fund activity in Sigma Designs Inc (NASDAQ:SIGM)
At Q3’s end, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 11% from the second quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, managed by Jim Simons, holds the largest position in Sigma Designs Inc (NASDAQ:SIGM). Renaissance Technologies has a $13.8 million position in the stock, comprising less than 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Millennium Management, led by Israel Englander, holding a $4.1 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish contain Ken Griffin’s Citadel Investment Group, Cliff Asness’ AQR Capital Management and Ken Fisher’s Fisher Asset Management.
Consequently, key money managers were breaking ground themselves. Fisher Asset Management, managed by Ken Fisher, established the biggest position in Sigma Designs Inc (NASDAQ:SIGM). Fisher Asset Management had $1.5 million invested in the company at the end of the quarter. Peter Algert and Kevin Coldiron’s Algert Coldiron Investors also initiated a $1.1 million position during the quarter. The other funds with new positions in the stock are Peter Muller’s PDT Partners, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Josh Goldberg’s G2 Investment Partners Management.
Let’s now review hedge fund activity in other stocks similar to Sigma Designs Inc (NASDAQ:SIGM). We will take a look at RadNet Inc. (NASDAQ:RDNT), Kandi Technolgies Corp. (NASDAQ:KNDI), Natural Gas Services Group, Inc. (NYSE:NGS), and Immune Desing Corp (NASDAQ:IMDZ). This group of stocks’ market caps are closest to SIGM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RDNT | 14 | 33702 | 0 |
| KNDI | 4 | 976 | 0 |
| NGS | 9 | 34127 | 0 |
| IMDZ | 6 | 16490 | 0 |
As you can see these stocks had an average of 8.25 hedge funds with bullish positions and the average amount invested in these stocks was $21 million. That figure was $33 million in SIGM’s case. RadNet Inc. (NASDAQ:RDNT) is the most popular stock in this table. On the other hand Kandi Technolgies Corp. (NASDAQ:KNDI) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Sigma Designs Inc (NASDAQ:SIGM) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
