Is Oplink Communications, Inc (NASDAQ:OPLK) a buy right now? The smart money is buying. The number of long hedge fund bets inched up by 1 lately.
To most investors, hedge funds are assumed to be underperforming, old investment tools of yesteryear. While there are over 8000 funds with their doors open at the moment, we at Insider Monkey hone in on the moguls of this club, around 450 funds. Most estimates calculate that this group controls the lion’s share of the smart money’s total asset base, and by keeping an eye on their highest performing stock picks, we have discovered a number of investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outperformed 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 beaten the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Just as beneficial, optimistic insider trading sentiment is another way to parse down the marketplace. There are a number of stimuli for an insider to get rid of shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Plenty of academic studies have demonstrated the market-beating potential of this tactic if piggybackers know where to look (learn more here).
Keeping this in mind, it’s important to take a glance at the recent action surrounding Oplink Communications, Inc (NASDAQ:OPLK).
How are hedge funds trading Oplink Communications, Inc (NASDAQ:OPLK)?
In preparation for this year, a total of 11 of the hedge funds we track were bullish in this stock, a change of 10% from one quarter earlier. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their holdings considerably.
Of the funds we track, Royce & Associates, managed by Chuck Royce, holds the biggest position in Oplink Communications, Inc (NASDAQ:OPLK). Royce & Associates has a $11 million position in the stock, comprising 0% of its 13F portfolio. The second largest stake is held by Renaissance Technologies, managed by Jim Simons, which held a $3 million position; 0% of its 13F portfolio is allocated to the stock. Remaining hedge funds with similar optimism include Cliff Asness’s AQR Capital Management, Israel Englander’s Millennium Management and Joel Greenblatt’s Gotham Asset Management.
Consequently, key hedge funds have been driving this bullishness. Highbridge Capital Management, managed by Glenn Russell Dubin, assembled the biggest position in Oplink Communications, Inc (NASDAQ:OPLK). Highbridge Capital Management had 0 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also initiated a $0 million position during the quarter.
What have insiders been doing with Oplink Communications, Inc (NASDAQ:OPLK)?
Insider purchases made by high-level executives is particularly usable when the company we’re looking at has experienced transactions within the past 180 days. Over the latest half-year time frame, Oplink Communications, Inc (NASDAQ:OPLK) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Oplink Communications, Inc (NASDAQ:OPLK). These stocks are Volterra Semiconductor Corporation (NASDAQ:VLTR), Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE), Audience Inc (NASDAQ:ADNC), ParkerVision, Inc. (NASDAQ:PRKR), and Peregrine Semiconductor Corp (NASDAQ:PSMI). This group of stocks are in the semiconductor – integrated circuits industry and their market caps match OPLK’s market cap.