Now, according to many of your fellow readers, hedge funds are perceived as delayed, old financial tools of an era lost to time. Although there are more than 8,000 hedge funds in operation in present day, Insider Monkey focuses on the upper echelon of this club, about 525 funds. It is assumed that this group controls the majority of the hedge fund industry’s total capital, and by tracking their best investments, we’ve brought to light a number of investment strategies that have historically beaten the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually 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 outpaced the S&P 500 index by 33 percentage points in 11 months (find the details here).
Equally as useful, bullish insider trading activity is another way to look at the investments you’re interested in. As the old adage goes: there are lots of stimuli for a corporate 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 strategy if shareholders understand what to do (learn more here).
What’s more, we’re going to examine the recent info about Altera Corporation (NASDAQ:ALTR).
What have hedge funds been doing with Altera Corporation (NASDAQ:ALTR)?
At Q2’s end, a total of 20 of the hedge funds we track were long in this stock, a change of -20% from the first quarter. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were increasing their stakes considerably.
Out of the hedge funds we follow, Boykin Curry’s Eagle Capital Management had the most valuable position in Altera Corporation (NASDAQ:ALTR), worth close to $331.3 million, accounting for 1.8% of its total 13F portfolio. Sitting at the No. 2 spot is Cadian Capital, managed by Eric Bannasch, which held a $259.3 million position; 8% of its 13F portfolio is allocated to the stock. Some other hedgies that hold long positions include William von Mueffling’s Cantillon Capital Management, Christopher Lord’s Criterion Capital and Ryan Frick and Oliver Evans’s Dorsal Capital Management.
As Altera Corporation (NASDAQ:ALTR) has faced declining interest from the smart money’s best and brightest, logic holds that there is a sect of money managers that elected to cut their entire stakes at the end of the second quarter. At the top of the heap, Charles Clough’s Clough Capital Partners dropped the largest stake of the 450+ funds we key on, totaling close to $15.6 million in call options., and Dmitry Balyasny of Balyasny Asset Management was right behind this move, as the fund cut about $14.2 million worth. These transactions are important to note, as aggregate hedge fund interest fell by 5 funds at the end of the second quarter.
Insider trading activity in Altera Corporation (NASDAQ:ALTR)
Insider buying made by high-level executives is particularly usable when the company we’re looking at has experienced transactions within the past six months. Over the latest half-year time period, Altera Corporation (NASDAQ:ALTR) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll also review the relationship between both of these indicators in other stocks similar to Altera Corporation (NASDAQ:ALTR). These stocks are LSI Corp (NASDAQ:LSI), ARM Holdings plc (ADR) (NASDAQ:ARMH), Microchip Technology Inc. (NASDAQ:MCHP), NVIDIA Corporation (NASDAQ:NVDA), and Linear Technology Corporation (NASDAQ:LLTC). All of these stocks are in the semiconductor – specialized industry and their market caps resemble ALTR’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| LSI Corp (NASDAQ:LSI) | 28 | 0 | 0 |
| ARM Holdings plc (ADR) (NASDAQ:ARMH) | 21 | 0 | 0 |
| Microchip Technology Inc. (NASDAQ:MCHP) | 22 | 0 | 0 |
| NVIDIA Corporation (NASDAQ:NVDA) | 29 | 0 | 0 |
| Linear Technology Corporation (NASDAQ:LLTC) | 21 | 0 | 0 |
Using the returns shown by our tactics, regular investors should always keep one eye on hedge fund and insider trading sentiment, and Altera Corporation (NASDAQ:ALTR) is no exception.
