Is JDS Uniphase Corp (NASDAQ:JDSU) undervalued? Money managers are getting more optimistic. The number of bullish hedge fund positions rose by 2 recently.
In the eyes of most shareholders, hedge funds are perceived as underperforming, outdated financial tools of the past. While there are more than 8000 funds trading at the moment, we at Insider Monkey hone in on the aristocrats of this group, about 450 funds. It is widely believed that this group oversees the lion's share of the smart money's total capital, and by watching their highest performing investments, we have spotted a few 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 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 outclassed the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).
Equally as important, bullish insider trading sentiment is another way to parse down the marketplace. As the old adage goes: there are plenty of stimuli for an insider to cut shares of his or her company, but only one, very simple reason why they would buy. Plenty of empirical studies have demonstrated the market-beating potential of this tactic if "monkeys" understand where to look (learn more here).
With all of this in mind, it's important to take a look at the key action surrounding JDS Uniphase Corp (NASDAQ:JDSU).
At the end of the fourth quarter, a total of 21 of the hedge funds we track were bullish in this stock, a change of 11% from the third quarter. With hedge funds' sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their holdings considerably.
Of the funds we track, Citadel Investment Group, managed by Ken Griffin, holds the most valuable position in JDS Uniphase Corp (NASDAQ:JDSU). Citadel Investment Group has a $70 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Manatuck Hill Partners, managed by Mark Broach, which held a $20 million position; 3% of its 13F portfolio is allocated to the company. Remaining peers that hold long positions include Cliff Asness's AQR Capital Management, Brian Ashford-Russell and Tim Woolley's Polar Capital and Steven Cohen's SAC Capital Advisors.
Consequently, some big names have been driving this bullishness. Manatuck Hill Partners, managed by Mark Broach, initiated the biggest position in JDS Uniphase Corp (NASDAQ:JDSU). Manatuck Hill Partners had 20 million invested in the company at the end of the quarter. Philip Hempleman's Ardsley Partners also made a $7 million investment in the stock during the quarter. The following funds were also among the new JDSU investors: Scott Fine and Peter Richards's Empire Capital Management, Anand Parekh's Alyeska Investment Group, and Glenn Russell Dubin's Highbridge Capital Management.
Insider buying is best served when the company in focus has seen transactions within the past 180 days. Over the last 180-day time frame, JDS Uniphase Corp (NASDAQ:JDSU) has experienced zero unique insiders purchasing, and 6 insider sales (see the details of insider trades here).
With the results shown by the aforementioned research, retail investors should always monitor hedge fund and insider trading sentiment, and JDS Uniphase Corp (NASDAQ:JDSU) is an important part of this process.
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