Is First Solar, Inc. (NASDAQ:FSLR) the right investment to pursue these days? The best stock pickers are turning less bullish. The number of bullish hedge fund positions retreated by 1 recently, but it’s worth noting that the managers who stuck with the stock have been rewarded today. Shares of First Solar are up nearly 50% this afternoon on the back of the company’s massive guidance boost. Let’s see what the smart money thinks about FSLR moving forward.
To most stock holders, hedge funds are viewed as underperforming, outdated investment vehicles of years past. While there are greater than 8000 funds with their doors open at the moment, we hone in on the masters of this group, close to 450 funds. It is estimated that this group controls the lion’s share of the hedge fund industry’s total capital, and by monitoring their top stock picks, we have unsheathed a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Equally as important, bullish insider trading activity is a second way to parse down the stock market universe. There are a number of incentives for a bullish insider to downsize shares of his or her company, but just one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the impressive potential of this tactic if investors know where to look (learn more here).
Keeping this in mind, let’s take a glance at the latest action encompassing First Solar, Inc. (NASDAQ:FSLR).
Hedge fund activity in First Solar, Inc. (NASDAQ:FSLR)
Heading into 2013, a total of 18 of the hedge funds we track were bullish in this stock, a change of -5% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their holdings substantially.
Of the funds we track, Coatue Management, managed by Philippe Laffont, holds the largest position in First Solar, Inc. (NASDAQ:FSLR). Coatue Management has a $60.6 million position in the stock, comprising 1% of its 13F portfolio. On Coatue Management’s heels is D E Shaw, managed by D. E. Shaw, which held a $46.5 million call position; 0.1% of its 13F portfolio is allocated to the stock. Other hedge funds with similar optimism include Chase Coleman and Feroz Dewan’s Tiger Global Management LLC, and John Thaler’s JAT Capital Management.
Due to the fact that First Solar, Inc. (NASDAQ:FSLR) has witnessed falling interest from the smart money, it’s safe to say that there lies a certain “tier” of money managers that decided to sell off their positions entirely last quarter. Intriguingly, Christopher Medlock James’s Partner Fund Management said goodbye to the biggest stake of the 450+ funds we track, totaling about $6.7 million in stock., and Robert Pohly of Samlyn Capital was right behind this move, as the fund sold off about $6.7 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 1 funds last quarter.
How have insiders been trading First Solar, Inc. (NASDAQ:FSLR)?
Insider trading activity, especially when it’s bullish, is best served when the company we’re looking at has seen transactions within the past 180 days. Over the latest six-month time frame, First Solar, Inc. (NASDAQ:FSLR) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to First Solar, Inc. (NASDAQ:FSLR). These stocks are SolarCity Corp (NASDAQ:SCTY), Cirrus Logic, Inc. (NASDAQ:CRUS), LSI Corp (NASDAQ:LSI), Silicon Laboratories (NASDAQ:SLAB), and SunPower Corporation (NASDAQ:SPWR). This group of stocks belong to the semiconductor – specialized industry and their market caps resemble FSLR’s market cap.