Is PMC-Sierra Inc (NASDAQ:PMCS) a sound investment now? The best stock pickers are in a pessimistic mood. The number of bullish hedge fund positions were cut by 1 recently.
In today’s marketplace, there are tons of gauges investors can use to analyze the equity markets. Some of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best fund managers can trounce the S&P 500 by a superb margin (see just how much).
Just as beneficial, bullish insider trading sentiment is a second way to parse down the world of equities. Obviously, there are a number of reasons for an executive to sell shares of his or her company, but just one, very clear reason why they would initiate a purchase. Many empirical studies have demonstrated the impressive potential of this strategy if you know where to look (learn more here).
With all of this in mind, it’s important to take a look at the recent action encompassing PMC-Sierra Inc (NASDAQ:PMCS).
How have hedgies been trading PMC-Sierra Inc (NASDAQ:PMCS)?
In preparation for this quarter, a total of 19 of the hedge funds we track were bullish in this stock, a change of -5% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their holdings considerably.
According to our comprehensive database, Cadian Capital, managed by Eric Bannasch, holds the biggest position in PMC-Sierra Inc (NASDAQ:PMCS). Cadian Capital has a $165.3 million position in the stock, comprising 4.6% of its 13F portfolio. On Cadian Capital’s heels is Ralph V. Whitworth of Relational Investors, with a $121.2 million position; 2.3% of its 13F portfolio is allocated to the stock. Other hedgies with similar optimism include Ken Fisher’s Fisher Asset Management, Ryan Frick and Oliver Evans’s Dorsal Capital Management and D. E. Shaw’s D E Shaw.
Seeing as PMC-Sierra Inc (NASDAQ:PMCS) has witnessed a declination in interest from the aggregate hedge fund industry, we can see that there is a sect of money managers that elected to cut their positions entirely heading into Q2. Interestingly, Lee Hobson’s Highside Capital Management cut the largest position of all the hedgies we monitor, valued at about $15.8 million in stock., and Ron Gutfleish of Elm Ridge Capital was right behind this move, as the fund said goodbye to about $7.5 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 1 funds heading into Q2.
What do corporate executives and insiders think about PMC-Sierra Inc (NASDAQ:PMCS)?
Insider trading activity, especially when it’s bullish, is best served when the primary stock in question has experienced transactions within the past 180 days. Over the last half-year time period, PMC-Sierra Inc (NASDAQ:PMCS) has experienced zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to PMC-Sierra Inc (NASDAQ:PMCS). These stocks are QLogic Corporation (NASDAQ:QLGC), Fairchild Semiconductor Intl Inc (NYSE:FCS), Power Integrations Inc (NASDAQ:POWI), RF Micro Devices, Inc. (NASDAQ:RFMD), and International Rectifier Corporation (NYSE:IRF). This group of stocks are in the semiconductor – integrated circuits industry and their market caps are similar to PMCS’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|QLogic Corporation (NASDAQ:QLGC)||19||0||0|
|Fairchild Semiconductor Intl Inc (NYSE:FCS)||18||0||6|
|Power Integrations Inc (NASDAQ:POWI)||5||0||10|
|RF Micro Devices, Inc. (NASDAQ:RFMD)||16||0||7|
|International Rectifier Corporation (NYSE:IRF)||6||1||5|
With the results exhibited by the aforementioned strategies, retail investors must always keep an eye on hedge fund and insider trading sentiment, and PMC-Sierra Inc (NASDAQ:PMCS) is an important part of this process.