Is AVX Corporation (NYSE:AVX) going to take off soon? Investors who are in the know are buying. The number of long hedge fund positions increased by 3 lately.
To most shareholders, hedge funds are viewed as slow, old financial tools of the past. While there are greater than 8000 funds in operation at the moment, we choose to focus on the crème de la crème of this group, about 450 funds. It is widely believed that this group controls the lion’s share of all hedge funds’ total capital, and by tracking their highest performing stock picks, we have uncovered a few investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually 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 outperformed the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Just as beneficial, positive insider trading activity is another way to break down the world of equities. There are a variety of incentives for an upper level exec to sell shares of his or her company, but only one, very obvious reason why they would buy. Many academic studies have demonstrated the valuable potential of this tactic if “monkeys” understand where to look (learn more here).
Keeping this in mind, we’re going to take a peek at the latest action encompassing AVX Corporation (NYSE:AVX).
What have hedge funds been doing with AVX Corporation (NYSE:AVX)?
Heading into 2013, a total of 16 of the hedge funds we track were bullish in this stock, a change of 23% from the previous quarter. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings substantially.
According to our comprehensive database, Chuck Royce’s Royce & Associates had the most valuable position in AVX Corporation (NYSE:AVX), worth close to $119.1 million, comprising 0.4% of its total 13F portfolio. Sitting at the No. 2 spot is Third Avenue Management, managed by Martin Whitman, which held a $43.6 million position; 0.9% of its 13F portfolio is allocated to the stock. Remaining hedge funds with similar optimism include Joel Greenblatt’s Gotham Asset Management, Ken Griffin’s Citadel Investment Group and Jim Simons’s Renaissance Technologies.
Now, specific money managers have jumped into AVX Corporation (NYSE:AVX) headfirst. Highbridge Capital Management, managed by Glenn Russell Dubin, created the largest position in AVX Corporation (NYSE:AVX). Highbridge Capital Management had 0.2 million invested in the company at the end of the quarter. Ken Gray and Steve Walsh’s Bryn Mawr Capital also initiated a $0.1 million position during the quarter. The only other fund with a new position in the stock is Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
How have insiders been trading AVX Corporation (NYSE:AVX)?
Insider purchases made by high-level executives is best served when the company we’re looking at has experienced transactions within the past six months. Over the last six-month time frame, AVX Corporation (NYSE:AVX) has seen zero unique insiders buying, and 1 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to AVX Corporation (NYSE:AVX). These stocks are Encore Wire Corporation (NASDAQ:WIRE), Molex Incorporated (NASDAQ:MOLX), Sanmina Corp (NASDAQ:SANM), Dolby Laboratories, Inc. (NYSE:DLB), and Acuity Brands, Inc. (NYSE:AYI). This group of stocks are in the diversified electronics industry and their market caps resemble AVX’s market cap.