Power One Inc (NASDAQ:PWER) investors should pay attention to a decrease in hedge fund interest of late.
In the eyes of most investors, hedge funds are perceived as underperforming, outdated financial tools of yesteryear. While there are over 8000 funds trading at the moment, we at Insider Monkey hone in on the masters of this group, close to 450 funds. It is widely believed that this group has its hands on most of the smart money’s total asset base, and by watching their best equity investments, we have figured out a number of investment strategies that have historically outstripped 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 started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Just as beneficial, positive insider trading sentiment is another way to break down the investments you’re interested in. Obviously, there are lots of stimuli for a bullish insider to downsize shares of his or her company, but only one, very obvious reason why they would behave bullishly. Several academic studies have demonstrated the useful potential of this tactic if “monkeys” know what to do (learn more here).
Keeping this in mind, let’s take a glance at the recent action encompassing Power One Inc (NASDAQ:PWER).
Hedge fund activity in Power One Inc (NASDAQ:PWER)
At Q1’s end, a total of 13 of the hedge funds we track held long positions in this stock, a change of 0% from the first quarter. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were boosting their holdings considerably.
When looking at the hedgies we track, Clifton S. Robbins’s Blue Harbour Group had the biggest position in Power One Inc (NASDAQ:PWER), worth close to $12.9 million, comprising 1.3% of its total 13F portfolio. The second largest stake is held by AQR Capital Management, managed by Cliff Asness, which held a $7 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other peers that hold long positions include Glenn Russell Dubin’s Highbridge Capital Management, John Zaro’s Bourgeon Capital and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.
Judging by the fact that Power One Inc (NASDAQ:PWER) has experienced falling interest from hedge fund managers, it’s safe to say that there was a specific group of fund managers that elected to cut their full holdings in Q1. Interestingly, Israel Englander’s Millennium Management dropped the biggest position of the “upper crust” of funds we key on, valued at close to $1.1 million in stock., and Paul Tudor Jones of Tudor Investment Corp was right behind this move, as the fund said goodbye to about $0.5 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
What do corporate executives and insiders think about Power One Inc (NASDAQ:PWER)?
Bullish insider trading is best served when the company we’re looking at has seen transactions within the past half-year. Over the latest six-month time period, Power One Inc (NASDAQ:PWER) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Power One Inc (NASDAQ:PWER). These stocks are Advanced Energy Industries, Inc. (NASDAQ:AEIS), Silicon Motion Technology Corp. (ADR) (NASDAQ:SIMO), Nam Tai Electronics, Inc. (NYSE:NTE), Orbotech Ltd. (NASDAQ:ORBK), and Methode Electronics Inc. (NYSE:MEI). This group of stocks are in the diversified electronics industry and their market caps are closest to PWER’s market cap.