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Hedge Funds Are Dumping Lattice Semiconductor (LSCC)

A whopping number of 13F filings filed with the U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30th, so let’s proceed with the discussion of the hedge fund sentiment on Lattice Semiconductor (NASDAQ:LSCC).

Lattice Semiconductor (NASDAQ:LSCC) registered a decline in the hedge fund interest between July and September. The company was in 8 hedge funds’ portfolios at the end of the third quarter of 2015. Lattice Semiconductor (NASDAQ:LSCC) has experienced a decrease in support from the world’s most elite money managers in recent months. There were 13 hedge funds in our database with LSCC positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as RigNet Inc (NASDAQ:RNET), RAIT Financial Trust (NYSE:RAS), and Tejon Ranch Company (NYSE:TRC) to gather more data points.

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In the eyes of most market participants, hedge funds are viewed as slow, outdated financial vehicles of yesteryear. While there are over 8000 funds in operation at the moment, our researchers hone in on the aristocrats of this group, around 700 funds. Most estimates calculate that this group of people preside over the majority of the smart money’s total capital, and by keeping an eye on their inimitable equity investments, Insider Monkey has figured out several investment strategies that have historically outrun the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points annually for a decade in their back tests.

Now, let’s take a look at the new action regarding Lattice Semiconductor (NASDAQ:LSCC).

What does the smart money think about Lattice Semiconductor (NASDAQ:LSCC)?

At the end of Q3, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 38% from one quarter earlier. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, billionaire George Soros’ Soros Fund Management holds the most valuable position in Lattice Semiconductor (NASDAQ:LSCC), worth $43.4 million, comprising 0.7% of its 13F portfolio. The second largest stake is held by D E Shaw, with a $3.5 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Some other peers that hold long positions comprise John Overdeck and David Siegel’s Two Sigma Advisors, Ken Gray and Steve Walsh’s Bryn Mawr Capital and Renaissance Technologies.

Judging by the fact that Lattice Semiconductor (NASDAQ:LSCC) has witnessed a declining sentiment from the aggregate hedge fund industry, we can see that there was a specific group of hedge funds who were dropping their entire stakes by the end of the third quarter. It’s worth mentioning that Cliff Asness’ AQR Capital Management dumped the biggest investment of all the hedgies followed by Insider Monkey, worth about $3.1 million in stock, and Lee Munder of Lee Munder Capital Group was right behind this move, as the fund sold off about $2.1 million worth. These moves are important to note, as aggregate hedge fund interest fell by 5 funds by the end of the third quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Lattice Semiconductor (NASDAQ:LSCC) but similarly valued. These stocks are RigNet Inc (NASDAQ:RNET), RAIT Financial Trust (NYSE:RAS), Tejon Ranch Company (NYSE:TRC), and Steel Partners Holdings LP (NYSE:SPLP). This group of stocks’ market caps is similar to LSCC’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
RNET 9 40236 1
RAS 15 46651 1
TRC 6 110737 1
SPLP 7 73864 2

As you can see, these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $68 million. By comparison, hedge funds amassed $52 million worth of Lattice Semiconductor’s stock and the overall interest is 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, RAIT Financial Trust (NYSE:RAS) might be a better candidate to consider a long position.

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