Silicon Graphics International Corp (NASDAQ:SGI) was in 15 hedge funds’ portfolio at the end of March. SGI investors should pay attention to an increase in hedge fund sentiment recently. There were 8 hedge funds in our database with SGI positions at the end of the previous quarter.
According to most investors, hedge funds are perceived as unimportant, old financial tools of years past. While there are over 8000 funds trading at present, we hone in on the top tier of this club, close to 450 funds. It is widely believed that this group has its hands on the majority of all hedge funds’ total asset base, and by keeping an eye on their top equity investments, we have spotted a number of investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a 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 outperformed the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
Just as beneficial, optimistic insider trading activity is a second way to break down the investments you’re interested in. Just as you’d expect, there are plenty of stimuli for a bullish insider to cut shares of his or her company, but only one, very clear reason why they would behave bullishly. Various empirical studies have demonstrated the market-beating potential of this strategy if “monkeys” know where to look (learn more here).
With these “truths” under our belt, let’s take a gander at the key action encompassing Silicon Graphics International Corp (NASDAQ:SGI).
What have hedge funds been doing with Silicon Graphics International Corp (NASDAQ:SGI)?
In preparation for this quarter, a total of 15 of the hedge funds we track were long in this stock, a change of 88% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes considerably.
Of the funds we track, Prescott Group Capital Management, managed by Phil Frohlich, holds the most valuable position in Silicon Graphics International Corp (NASDAQ:SGI). Prescott Group Capital Management has a $25.9 million position in the stock, comprising 5.8% of its 13F portfolio. On Prescott Group Capital Management’s heels is Citadel Investment Group, managed by Ken Griffin, which held a $4.2 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other hedge funds that are bullish include Israel Englander’s Millennium Management, D. E. Shaw’s D E Shaw and Neil Chriss’s Hutchin Hill Capital.
As one would reasonably expect, specific money managers were leading the bulls’ herd. Hutchin Hill Capital, managed by Neil Chriss, established the biggest position in Silicon Graphics International Corp (NASDAQ:SGI). Hutchin Hill Capital had 1.6 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $0.6 million position during the quarter. The following funds were also among the new SGI investors: Steven Cohen’s SAC Capital Advisors, Mike Vranos’s Ellington, and John Overdeck and David Siegel’s Two Sigma Advisors.
How are insiders trading Silicon Graphics International Corp (NASDAQ:SGI)?
Insider trading activity, especially when it’s bullish, is most useful when the company in question has experienced transactions within the past six months. Over the last half-year time frame, Silicon Graphics International Corp (NASDAQ:SGI) has experienced 1 unique insiders buying, and 5 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Silicon Graphics International Corp (NASDAQ:SGI). These stocks are International Business Machines Corp. (NYSE:IBM), Hewlett-Packard Company (NYSE:HPQ), Teradata Corporation (NYSE:TDC), , and Cray Inc. (NASDAQ:CRAY). This group of stocks are the members of the diversified computer systems industry and their market caps resemble SGI’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|International Business Machines Corp. (NYSE:IBM)||49||0||17|
|Hewlett-Packard Company (NYSE:HPQ)||47||0||0|
|Teradata Corporation (NYSE:TDC)||25||0||4|
|Cray Inc. (NASDAQ:CRAY)||17||0||10|
With the returns demonstrated by the aforementioned tactics, retail investors should always pay attention to hedge fund and insider trading activity, and Silicon Graphics International Corp (NASDAQ:SGI) applies perfectly to this mantra.