Why Are Hedge Funds Selling Shares Of Comverse Inc. (CNSI), EMCORE Corporation (EMKR)?

Becker Drapkin Management, the other hedge fund discussed in our article, is a Texas-based activist firm founded by Matthew Drapkin and Steven R. Becker in 2004. The hedge fund, formerly known as SRB Management LP, employs fundamental analysis in constructing its portfolio and primarily invests in deep value stocks of small-cap companies. The fund’s latest 13F filing reveals that Becker Drapkin Management oversees a public equity portfolio with a market value of $114.64 million as of June 30.

EMCORE Corporation (NASDAQ:EMKR) is a technology company that offers a wide portfolio of compound semiconductor-based products for the broadband and specialty fiber-optics markets. The company’s stock performance has been quite strong so far this year, as the shares of EMCORE have gained 33% year-to-date. In contrast to the aforementioned case, Becker Drapkin Management has been gradually offloading its stake in EMCORE in an attempt to cash out some of its profits on this investment. Earlier this month, the investment firm disclosed selling 883,611 shares of EMCORE at prices in the range of $6.55-$7.40. The recently-announced Stock Purchase Plans with Tourmaline Partners takes away all doubts about Becker Drapkin Management’s intentions; the investment firm plans to get out of this successful position. At the beginning of August, EMCORE Corporation announced its financial results for the fiscal third quarter of 2015, posting consolidated revenue of $21.2 million, which was up by 11.2% quarter-over-quarter. At the same time, the company reported non-GAAP income from continuing operations of $1.3 million, which was an increase by the same $1.3 million from the previous quarter. The fiscal fourth quarter revenue is expected to come in at $22 to $24 million. Jim Simons’ Renaissance Technologies significantly boosted its stake in EMCORE Corporation (NASDAQ:EMKR) during the second quarter to 1.28 million shares.

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