Trina Solar Limited (ADR) (TSL): This Metric Says You Are Smart to Sell GT Advanced Technologies Inc (GTAT)

GT Advanced Technologies Inc (NASDAQ:GTAT) investors should be aware of a decrease in activity from the world’s largest hedge funds recently. We’ll also take a peek at the smart money’s interest in Trina Solar Limited (ADR) (NYSE:TSL) and CEVA, Inc. (NASDAQ:CEVA), both also operating in the specialized semiconductor space.

If you’d ask most stock holders, hedge funds are assumed to be slow, old financial vehicles of yesteryear. While there are over 8000 funds in operation at present, we look at the aristocrats of this group, around 450 funds. It is widely believed that this group controls the lion’s share of the smart money’s total capital, and by monitoring their highest performing investments, we have revealed a number of investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year 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 trumped the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).

GT Advanced Technologies Inc (NASDAQ:GTAT)

Just as key, bullish insider trading sentiment is a second way to break down the marketplace. Just as you’d expect, there are a variety of motivations for an executive to sell shares of his or her company, but only one, very simple reason why they would buy. Various empirical studies have demonstrated the useful potential of this method if shareholders understand what to do (learn more here).

With these “truths” under our belt, we’re going to take a gander at the latest action encompassing GT Advanced Technologies Inc (NASDAQ:GTAT).

How have hedgies been trading GT Advanced Technologies Inc (NASDAQ:GTAT)?

At year’s end, a total of 16 of the hedge funds we track held long positions in this stock, a change of -11% from the third quarter. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their stakes substantially.

Of the funds we track, Kerr Neilson’s Platinum Asset Management had the biggest position in GT Advanced Technologies Inc (NASDAQ:GTAT), worth close to $7 million, comprising 0.2% of its total 13F portfolio. Sitting at the No. 2 spot is Phil Frohlich of Prescott Group Capital Management, with a $3 million position; 0.2% of its 13F portfolio is allocated to the company. Remaining peers that hold long positions include Joel Greenblatt’s Gotham Asset Management, Eric Sprott’s Sprott Asset Management and Andrew R. Midler’s Savitr Capital.

Judging by the fact that GT Advanced Technologies Inc (NASDAQ:GTAT) has experienced falling interest from hedge fund managers, it’s safe to say that there was a specific group of hedgies that slashed their positions entirely at the end of the year. Intriguingly, John Kleinheinz’s Kleinheinz Capital Partners sold off the largest position of the “upper crust” of funds we key on, worth an estimated $8 million in stock.. Howard Marks’s fund, Oaktree Capital Management, also said goodbye to its stock, about $7 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 2 funds at the end of the year.

How have insiders been trading GT Advanced Technologies Inc (NASDAQ:GTAT)?

Insider purchases made by high-level executives is at its handiest when the company we’re looking at has experienced transactions within the past half-year. Over the latest six-month time period, GT Advanced Technologies Inc (NASDAQ:GTAT) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here). Let’s see what a couple of its peers, Trina Solar Limited (ADR) (NYSE:TSL) and CEVA, Inc. (NASDAQ:CEVA), have experienced over this same time frame.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Trina Solar Limited (ADR) (NYSE:TSL) 9 0 0
CEVA, Inc. (NASDAQ:CEVA) 11 0 1

With the returns demonstrated by Insider Monkey’s studies, everyday investors should always watch hedge fund and insider trading activity, and GT Advanced Technologies Inc (NASDAQ:GTAT) shareholders fit into this picture quite nicely.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.

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