SunPower Corporation (SPWR): The Metric You Have To Keep An Eye On

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SunPower Corporation (NASDAQ:SPWR) was in 9 hedge funds’ portfolio at the end of December. SPWR investors should be aware of a decrease in enthusiasm from smart money recently. There were 13 hedge funds in our database with SPWR positions at the end of the previous quarter.

To most shareholders, hedge funds are assumed to be underperforming, old investment vehicles of years past. While there are over 8000 funds with their doors open today, we look at the bigwigs of this group, around 450 funds. It is widely believed that this group oversees the majority of the hedge fund industry’s total capital, and by paying attention to their top picks, we have spotted a few investment strategies that have historically outstripped the S&P 500 index. 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 outpaced the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).

SunPower Corporation (NASDAQ:SPWR)Just as beneficial, positive insider trading activity is another way to break down the financial markets. There are plenty of reasons for an upper level exec to sell shares of his or her company, but only one, very clear reason why they would buy. Several academic studies have demonstrated the impressive potential of this method if investors know what to do (learn more here).

Keeping this in mind, let’s take a look at the recent action encompassing SunPower Corporation (NASDAQ:SPWR).

How are hedge funds trading SunPower Corporation (NASDAQ:SPWR)?

At the end of the fourth quarter, a total of 9 of the hedge funds we track were long in this stock, a change of -31% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their stakes substantially.

When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the largest position in SunPower Corporation (NASDAQ:SPWR). Royce & Associates has a $8.7 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Philip Hempleman of Ardsley Partners, with a $7.3 million position; 1.5% of its 13F portfolio is allocated to the stock. Remaining peers with similar optimism include John A. Levin’s Levin Capital Strategies, Ken Griffin’s Citadel Investment Group and D. E. Shaw’s D E Shaw.

Judging by the fact that SunPower Corporation (NASDAQ:SPWR) has witnessed declining sentiment from the smart money, it’s easy to see that there lies a certain “tier” of hedgies that slashed their entire stakes heading into 2013. Interestingly, Peter J. Eichler Jr.’s Aletheia Research and Management cut the biggest investment of the “upper crust” of funds we key on, worth close to $5.9 million in stock., and Jim Simons of Renaissance Technologies was right behind this move, as the fund said goodbye to about $1.2 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 4 funds heading into 2013.

What have insiders been doing with SunPower Corporation (NASDAQ:SPWR)?

Insider purchases made by high-level executives is best served when the company in focus has seen transactions within the past half-year. Over the last 180-day time period, SunPower Corporation (NASDAQ:SPWR) has experienced zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to SunPower Corporation (NASDAQ:SPWR). These stocks are LSI Corp (NASDAQ:LSI), SolarCity Corp (NASDAQ:SCTY), Cirrus Logic, Inc. (NASDAQ:CRUS), First Solar, Inc. (NASDAQ:FSLR), and Silicon Laboratories (NASDAQ:SLAB). This group of stocks are the members of the semiconductor – specialized industry and their market caps are similar to SPWR’s market cap.

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