Aeroflex Holding Corp. (NYSE:ARX) has seen an increase in support from the world’s most elite money managers recently.
According to most stock holders, hedge funds are assumed to be unimportant, old investment tools of yesteryear. While there are over 8000 funds trading at present, we look at the upper echelon of this club, around 450 funds. It is estimated that this group has its hands on the majority of all hedge funds’ total asset base, and by watching their top equity investments, we have unearthed a few investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outperformed 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 trumped the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Just as important, optimistic insider trading activity is another way to break down the world of equities. Just as you’d expect, 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 behave bullishly. Several empirical studies have demonstrated the impressive potential of this strategy if investors know where to look (learn more here).
With all of this in mind, we’re going to take a peek at the key action regarding Aeroflex Holding Corp. (NYSE:ARX).
Hedge fund activity in Aeroflex Holding Corp. (NYSE:ARX)
At the end of the fourth quarter, a total of 7 of the hedge funds we track held long positions in this stock, a change of 17% from the third quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings significantly.
When looking at the hedgies we track, Pennant Capital Management, managed by Alan Fournier, holds the biggest position in Aeroflex Holding Corp. (NYSE:ARX). Pennant Capital Management has a $32.8 million position in the stock, comprising 0.7% of its 13F portfolio. Coming in second is Matt Sirovich and Jeremy Mindich of Scopia Capital, with a $10.9 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Other hedge funds with similar optimism include Ken Griffin’s Citadel Investment Group, Israel Englander’s Millennium Management and D. E. Shaw’s D E Shaw.
Now, key hedge funds have been driving this bullishness. Millennium Management, managed by Israel Englander, initiated the biggest position in Aeroflex Holding Corp. (NYSE:ARX). Millennium Management had 0.6 million invested in the company at the end of the quarter. Joel Greenblatt’s Gotham Asset Management also initiated a $0.4 million position during the quarter.
How are insiders trading Aeroflex Holding Corp. (NYSE:ARX)?
Bullish insider trading is at its handiest when the company in focus has seen transactions within the past half-year. Over the last six-month time period, Aeroflex Holding Corp. (NYSE:ARX) has experienced 2 unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Aeroflex Holding Corp. (NYSE:ARX). These stocks are Cabot Microelectronics Corporation (NASDAQ:CCMP), OmniVision Technologies, Inc. (NASDAQ:OVTI), Amkor Technology, Inc. (NASDAQ:AMKR), Micrel, Incorporated (NASDAQ:MCRL), and EZchip Semiconductor Ltd. (NASDAQ:EZCH). All of these stocks are in the semiconductor – integrated circuits industry and their market caps match ARX’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Cabot Microelectronics Corporation (NASDAQ:CCMP)||5||0||13|
|OmniVision Technologies, Inc. (NASDAQ:OVTI)||17||0||2|
|Amkor Technology, Inc. (NASDAQ:AMKR)||11||0||0|
|Micrel, Incorporated (NASDAQ:MCRL)||6||2||1|
|EZchip Semiconductor Ltd. (NASDAQ:EZCH)||7||0||0|
With the returns shown by our time-tested strategies, retail investors should always monitor hedge fund and insider trading sentiment, and Aeroflex Holding Corp. (NYSE:ARX) is an important part of this process.