Do Hedge Funds Love Applied Micro Circuits Corporation (AMCC)?

Since Applied Micro Circuits Corporation (NASDAQ:AMCC) has witnessed a declination in interest from the aggregate hedge fund industry, it’s safe to say that there exists a select few hedgies who were dropping their positions entirely in the third quarter. Interestingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dropped the biggest investment of the 700 funds watched by Insider Monkey, comprising about $0.2 million in stock. Richard Driehaus’s fund, Driehaus Capital, also cut its stock, about $0.1 million worth. These transactions are interesting, as total hedge fund interest dropped by 3 funds in the third quarter.

Let’s check out hedge fund activity in other stocks similar to Applied Micro Circuits Corporation (NASDAQ:AMCC). These stocks are AG Mortgage Investment Trust Inc (NYSE:MITT), LivePerson, Inc. (NASDAQ:LPSN), FutureFuel Corp. (NYSE:FF), and Otonomy Inc (NASDAQ:OTIC). This group of stocks’ market valuations match AMCC’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MITT 7 17131 1
LPSN 18 83021 4
FF 13 31873 -1
OTIC 14 74199 1

As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $52 million, while in AMCC’s case, that figure stood at $70 million. LivePerson, Inc. (NASDAQ:LPSN) is the most popular stock in this table. On the other hand AG Mortgage Investment Trust Inc (NYSE:MITT) is the least popular one with only 7 bullish hedge fund positions. Applied Micro Circuits Corporation (NASDAQ:AMCC) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard LPSN might be a better candidate to consider a long position.