Power Integrations Inc (NASDAQ:POWI) was in 7 hedge funds’ portfolio at the end of December. POWI has experienced a decrease in enthusiasm from smart money of late. There were 7 hedge funds in our database with POWI holdings at the end of the previous quarter.
To the average investor, there are plenty of methods shareholders can use to analyze publicly traded companies. A pair 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 best picks of the top investment managers can outpace the S&P 500 by a solid amount (see just how much).
Just as key, optimistic insider trading sentiment is another way to parse down the marketplace. As the old adage goes: there are many reasons for a bullish insider to drop shares of his or her company, but only one, very clear reason why they would behave bullishly. Various academic studies have demonstrated the market-beating potential of this strategy if you know what to do (learn more here).
With all of this in mind, it’s important to take a look at the key action surrounding Power Integrations Inc (NASDAQ:POWI).
How are hedge funds trading Power Integrations Inc (NASDAQ:POWI)?
Heading into 2013, a total of 7 of the hedge funds we track were long in this stock, a change of 0% from the previous quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their holdings significantly.
According to our comprehensive database, Renaissance Technologies, managed by Jim Simons, holds the largest position in Power Integrations Inc (NASDAQ:POWI). Renaissance Technologies has a $7.1 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Renaissance Technologies’s heels is SG Capital Management, managed by Ken Grossman and Glen Schneider, which held a $6 million position; 3.1% of its 13F portfolio is allocated to the stock. Other hedge funds with similar optimism include Ken Griffin’s Citadel Investment Group, Chuck Royce’s Royce & Associates and Israel Englander’s Millennium Management.
Because Power Integrations Inc (NASDAQ:POWI) has witnessed bearish sentiment from the entirety of the hedge funds we track, we can see that there is a sect of money managers who sold off their positions entirely in Q4. It’s worth mentioning that Paul Tudor Jones’s Tudor Investment Corp cut the largest position of all the hedgies we monitor, comprising close to $0.5 million in stock. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
How have insiders been trading Power Integrations Inc (NASDAQ:POWI)?
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 latest six-month time period, Power Integrations Inc (NASDAQ:POWI) has seen zero unique insiders buying, and 10 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Power Integrations Inc (NASDAQ:POWI). These stocks are MEMC Electronic Materials, Inc. (NYSE:WFR), RF Micro Devices, Inc. (NASDAQ:RFMD), QLogic Corporation (NASDAQ:QLGC), International Rectifier Corporation (NYSE:IRF), and PMC-Sierra Inc (NASDAQ:PMCS). All of these stocks are in the semiconductor – integrated circuits industry and their market caps match POWI’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| MEMC Electronic Materials, Inc. (NYSE:WFR) | 16 | 3 | 0 |
| RF Micro Devices, Inc. (NASDAQ:RFMD) | 15 | 0 | 4 |
| QLogic Corporation (NASDAQ:QLGC) | 14 | 0 | 1 |
| International Rectifier Corporation (NYSE:IRF) | 6 | 2 | 2 |
| PMC-Sierra Inc (NASDAQ:PMCS) | 20 | 0 | 2 |
With the results demonstrated by the aforementioned studies, retail investors should always monitor hedge fund and insider trading sentiment, and Power Integrations Inc (NASDAQ:POWI) shareholders fit into this picture quite nicely.
