Pericom Semiconductor (NASDAQ:PSEM) has seen a decrease in hedge fund interest lately.
According to most shareholders, hedge funds are perceived as unimportant, outdated investment tools of the past. While there are over 8000 funds in operation at present, we at Insider Monkey choose to focus on the masters of this group, around 450 funds. Most estimates calculate that this group oversees the lion’s share of all hedge funds’ total asset base, and by tracking their highest performing equity investments, we have formulated a number of investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually 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 outperformed the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
Equally as integral, bullish insider trading activity is another way to break down the world of equities. As the old adage goes: there are lots of motivations for a corporate insider to sell shares of his or her company, but just one, very clear reason why they would buy. Many empirical studies have demonstrated the valuable potential of this strategy if “monkeys” know where to look (learn more here).
Consequently, we’re going to take a peek at the recent action surrounding Pericom Semiconductor (NASDAQ:PSEM).
Hedge fund activity in Pericom Semiconductor (NASDAQ:PSEM)
At the end of the first quarter, a total of 7 of the hedge funds we track were long in this stock, a change of 0% from the first quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their stakes considerably.
When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the biggest position in Pericom Semiconductor (NASDAQ:PSEM). Royce & Associates has a $12.7 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Chilton Investment Company, managed by Richard Chilton, which held a $3.9 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining peers that hold long positions include Jim Simons’s Renaissance Technologies, John Overdeck and David Siegel’s Two Sigma Advisors and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.
Since Pericom Semiconductor (NASDAQ:PSEM) has witnessed declining sentiment from the smart money, logic holds that there lies a certain “tier” of fund managers who were dropping their positions entirely last quarter. It’s worth mentioning that Peter Rathjens Bruce Clarke and John Campbell’s Arrowstreet Capital said goodbye to the largest position of the “upper crust” of funds we monitor, totaling an estimated $0.1 million in stock. These bearish behaviors are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
What have insiders been doing with Pericom Semiconductor (NASDAQ:PSEM)?
Bullish insider trading is particularly usable when the company in question has experienced transactions within the past six months. Over the latest six-month time frame, Pericom Semiconductor (NASDAQ:PSEM) has experienced zero 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 Pericom Semiconductor (NASDAQ:PSEM). These stocks are MoSys Inc. (NASDAQ:MOSY), DSP Group, Inc. (NASDAQ:DSPG), EMCORE Corporation (NASDAQ:EMKR), Tower Semiconductor Ltd. (USA) (NASDAQ:TSEM), and ANADIGICS, Inc. (NASDAQ:ANAD). This group of stocks are in the semiconductor – integrated circuits industry and their market caps are similar to PSEM’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|MoSys Inc. (NASDAQ:MOSY)||4||1||0|
|DSP Group, Inc. (NASDAQ:DSPG)||8||4||0|
|EMCORE Corporation (NASDAQ:EMKR)||11||0||7|
|Tower Semiconductor Ltd. (USA) (NASDAQ:TSEM)||1||0||0|
|ANADIGICS, Inc. (NASDAQ:ANAD)||5||0||2|
With the results exhibited by the aforementioned tactics, retail investors should always watch hedge fund and insider trading sentiment, and Pericom Semiconductor (NASDAQ:PSEM) applies perfectly to this mantra.