Synaptics, Incorporated (NASDAQ:SYNA) has experienced a decrease in activity from the world's largest hedge funds lately.
According to most stock holders, hedge funds are seen as unimportant, old financial vehicles of yesteryear. While there are more than 8000 funds trading at present, we at Insider Monkey choose to focus on the bigwigs of this group, close to 450 funds. It is estimated that this group oversees the majority of the smart money's total asset base, and by keeping an eye on their highest performing stock picks, we have unearthed a number of investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a 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 outperformed the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).
Equally as key, bullish insider trading activity is another way to break down the financial markets. There are lots of stimuli for an upper level exec to get rid of shares of his or her company, but only one, very obvious reason why they would behave bullishly. Several academic studies have demonstrated the market-beating potential of this strategy if shareholders know what to do (learn more here).
Keeping this in mind, let's take a glance at the recent action surrounding Synaptics, Incorporated (NASDAQ:SYNA).
Heading into 2013, a total of 9 of the hedge funds we track were long in this stock, a change of -31% from one quarter earlier. With hedge funds' capital changing hands, there exists a select group of key hedge fund managers who were upping their stakes meaningfully.
When looking at the hedgies we track, Jim Simons's Renaissance Technologies had the most valuable position in Synaptics, Incorporated (NASDAQ:SYNA), worth close to $18.1 million, comprising 0.1% of its total 13F portfolio. On Renaissance Technologies's heels is Paul Reeder and Edward Shapiro of PAR Capital Management, with a $8.9 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Ken Griffin's Citadel Investment Group, Mark Kingdon's Kingdon Capital and D. E. Shaw's D E Shaw.
Judging by the fact that Synaptics, Incorporated (NASDAQ:SYNA) has faced bearish sentiment from the aggregate hedge fund industry, it's safe to say that there lies a certain "tier" of fund managers that elected to cut their entire stakes in Q4. Intriguingly, John Hurley's Cavalry Asset Management sold off the biggest stake of the "upper crust" of funds we watch, worth close to $10.8 million in stock., and Matt Sirovich and Jeremy Mindich of Scopia Capital was right behind this move, as the fund cut about $8.3 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 4 funds in Q4.
Insider purchases made by high-level executives is particularly usable when the company we're looking at has seen transactions within the past half-year. Over the last six-month time frame, Synaptics, Incorporated (NASDAQ:SYNA) has experienced zero unique insiders buying, and 2 insider sales (see the details of insider trades here).
Let's also take a look at hedge fund and insider activity in other stocks similar to Synaptics, Incorporated (NASDAQ:SYNA). These stocks are Stratasys, Ltd. (NASDAQ:SSYS), Nice Systems Ltd (ADR) (NASDAQ:NICE), Electronics For Imaging, Inc. (NASDAQ:EFII), Logitech International SA (USA) (NASDAQ:LOGI), and Universal Display Corporation (NASDAQ:PANL). All of these stocks are in the computer peripherals industry and their market caps resemble SYNA's market cap.