Applied Materials, Inc. (NASDAQ:AMAT) has seen a decrease in activity from the world’s largest hedge funds lately.
In the eyes of most traders, hedge funds are viewed as worthless, outdated financial vehicles of years past. While there are over 8000 funds with their doors open at present, we at Insider Monkey look at the top tier of this club, close to 450 funds. It is widely believed that this group has its hands on most of the smart money’s total asset base, and by monitoring their best picks, we have brought to light a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outpaced 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 topped the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
Just as integral, positive insider trading sentiment is another way to break down the marketplace. As the old adage goes: there are plenty of stimuli for an insider to sell shares of his or her company, but only one, very simple reason why they would initiate a purchase. Various empirical studies have demonstrated the valuable potential of this tactic if shareholders know where to look (learn more here).
With all of this in mind, it’s important to take a look at the key action surrounding Applied Materials, Inc. (NASDAQ:AMAT).
Hedge fund activity in Applied Materials, Inc. (NASDAQ:AMAT)
In preparation for this quarter, a total of 23 of the hedge funds we track were bullish in this stock, a change of -8% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their holdings considerably.
Of the funds we track, Edinburgh Partners, managed by Sandy Nairn, holds the most valuable position in Applied Materials, Inc. (NASDAQ:AMAT). Edinburgh Partners has a $202.3 million position in the stock, comprising 12.3% of its 13F portfolio. On Edinburgh Partners’s heels is Third Avenue Management, managed by Martin Whitman, which held a $136.4 million position; the fund has 2.6% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Daniel Bubis’s Tetrem Capital Management and Ron Gutfleish’s Elm Ridge Capital.
Since Applied Materials, Inc. (NASDAQ:AMAT) has witnessed a declination in interest from the entirety of the hedge funds we track, it’s safe to say that there were a few money managers that elected to cut their entire stakes at the end of the first quarter. At the top of the heap, Charles de Vaulx’s International Value Advisers said goodbye to the biggest investment of all the hedgies we monitor, valued at close to $174.2 million in stock.. Michael Lowenstein’s fund, Kensico Capital, also dropped its stock, about $23.4 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 2 funds at the end of the first quarter.
What have insiders been doing with Applied Materials, Inc. (NASDAQ:AMAT)?
Insider purchases made by high-level executives is best served when the company we’re looking at has experienced transactions within the past six months. Over the last half-year time frame, Applied Materials, Inc. (NASDAQ:AMAT) has experienced 1 unique insiders buying, and 8 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Applied Materials, Inc. (NASDAQ:AMAT). These stocks are Advanced Semiconductor Engineering (ADR) (NYSE:ASX), Cree, Inc. (NASDAQ:CREE), Lam Research Corporation (NASDAQ:LRCX), KLA-Tencor Corporation (NASDAQ:KLAC), and ASML Holding N.V. (ADR) (NASDAQ:ASML). This group of stocks are in the semiconductor equipment & materials industry and their market caps are similar to AMAT’s market cap.