Is Skyworks Solutions Inc (NASDAQ:SWKS) Going to Burn These Hedge Funds?

Skyworks Solutions Inc (NASDAQ:SWKS) was in 20 hedge funds’ portfolio at the end of the fourth quarter of 2012. SWKS investors should be aware of a decrease in support from the world’s most elite money managers recently. There were 25 hedge funds in our database with SWKS holdings at the end of the previous quarter.

According to most shareholders, hedge funds are viewed as worthless, old investment vehicles of years past. While there are more than 8000 funds in operation at the moment, we at Insider Monkey look at the masters of this club, close to 450 funds. It is widely believed that this group controls most of all hedge funds’ total capital, and by tracking their best investments, we have deciphered a few investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually 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 topped the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).

Skyworks Solutions Inc (NASDAQ:SWKS)Just as beneficial, optimistic insider trading sentiment is a second way to break down the world of equities. There are a number of motivations for a corporate insider to cut shares of his or her company, but only one, very obvious reason why they would buy. Many academic studies have demonstrated the market-beating potential of this method if you understand where to look (learn more here).

Now, let’s take a look at the latest action regarding Skyworks Solutions Inc (NASDAQ:SWKS).

How have hedgies been trading Skyworks Solutions Inc (NASDAQ:SWKS)?

In preparation for this year, a total of 20 of the hedge funds we track were long in this stock, a change of -20% from the previous quarter. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their stakes significantly.

When looking at the hedgies we track, Maverick Capital, managed by Lee Ainslie, holds the largest position in Skyworks Solutions Inc (NASDAQ:SWKS). Maverick Capital has a $150 million position in the stock, comprising 2.2% of its 13F portfolio. Coming in second is Ken Griffin of Citadel Investment Group, with a $34 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Amy Minella’s Cardinal Capital, Ken Grossman and Glen Schneider’s SG Capital Management and Ken Griffin’s Citadel Investment Group.

Because Skyworks Solutions Inc (NASDAQ:SWKS) has faced falling interest from hedge fund managers, it’s safe to say that there was a specific group of funds who sold off their full holdings in Q4. Interestingly, Bain Capital’s Brookside Capital dumped the largest investment of the “upper crust” of funds we monitor, worth an estimated $91 million in stock., and Daniel Benton of Andor Capital Management was right behind this move, as the fund dumped about $24 million worth. These moves are important to note, as total hedge fund interest was cut by 5 funds in Q4.

What have insiders been doing with Skyworks Solutions Inc (NASDAQ:SWKS)?

Insider trading activity, especially when it’s bullish, is particularly usable when the company we’re looking at has experienced transactions within the past six months. Over the latest six-month time period, Skyworks Solutions Inc (NASDAQ:SWKS) has experienced zero unique insiders buying, and 3 insider sales (see the details of insider trades here).

With the returns demonstrated by Insider Monkey’s tactics, everyday investors should always monitor hedge fund and insider trading activity, and Skyworks Solutions Inc (NASDAQ:SWKS) shareholders fit into this picture quite nicely.

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Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.

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