Finisar Corporation (NASDAQ:FNSR) investors should pay attention to an increase in activity from the world’s largest hedge funds of late.
In the eyes of most market participants, hedge funds are viewed as slow, outdated investment tools of yesteryear. While there are over 8000 funds in operation at the moment, we look at the bigwigs of this club, around 450 funds. It is widely believed that this group controls the majority of the smart money’s total capital, and by tracking their best stock picks, we have come up with a number of investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Equally as integral, optimistic insider trading activity is another way to parse down the stock market universe. Obviously, there are a variety of incentives for a corporate insider to drop shares of his or her company, but just one, very clear reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the impressive potential of this tactic if investors know where to look (learn more here).
Now, let’s take a peek at the key action surrounding Finisar Corporation (NASDAQ:FNSR).
What have hedge funds been doing with Finisar Corporation (NASDAQ:FNSR)?
At the end of the first quarter, a total of 18 of the hedge funds we track were long in this stock, a change of 13% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their holdings substantially.
Of the funds we track, Fisher Asset Management, managed by Ken Fisher, holds the most valuable position in Finisar Corporation (NASDAQ:FNSR). Fisher Asset Management has a $58.9 million position in the stock, comprising 0.2% of its 13F portfolio. Sitting at the No. 2 spot is Platinum Asset Management, managed by Kerr Neilson, which held a $12.7 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Don Morgan’s Brigade Capital, Chuck Royce’s Royce & Associates and Glenn Russell Dubin’s Highbridge Capital Management.
As one would reasonably expect, key hedge funds were leading the bulls’ herd. Brigade Capital, managed by Don Morgan, created the largest position in Finisar Corporation (NASDAQ:FNSR). Brigade Capital had 10.6 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also initiated a $6.1 million position during the quarter. The other funds with brand new FNSR positions are Dmitry Balyasny’s Balyasny Asset Management, Christopher Zepf and Brian Thonn’s Kingdom Ridge Capital, and Israel Englander’s Millennium Management.
Insider trading activity in Finisar Corporation (NASDAQ:FNSR)
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 half-year time period, Finisar Corporation (NASDAQ:FNSR) has seen zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Finisar Corporation (NASDAQ:FNSR). These stocks are Black Box Corporation (NASDAQ:BBOX), Palo Alto Networks Inc (NYSE:PANW), Super Micro Computer, Inc. (NASDAQ:SMCI), Aruba Networks, Inc. (NASDAQ:ARUN), and Riverbed Technology, Inc. (NASDAQ:RVBD). This group of stocks are in the networking & communication devices industry and their market caps are similar to FNSR’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Black Box Corporation (NASDAQ:BBOX)||4||0||0|
|Palo Alto Networks Inc (NYSE:PANW)||20||0||6|
|Super Micro Computer, Inc. (NASDAQ:SMCI)||6||0||3|
|Aruba Networks, Inc. (NASDAQ:ARUN)||23||0||7|
|Riverbed Technology, Inc. (NASDAQ:RVBD)||24||0||6|
With the results exhibited by Insider Monkey’s tactics, everyday investors must always keep an eye on hedge fund and insider trading activity, and Finisar Corporation (NASDAQ:FNSR) applies perfectly to this mantra.