Here is What Hedge Funds Think About Molex Incorporated (NASDAQ:MOLX)

Molex Incorporated (NASDAQ:MOLX) shareholders have witnessed a decrease in hedge fund sentiment recently.

According to most shareholders, hedge funds are seen as worthless, outdated investment vehicles of the past. While there are over 8000 funds in operation today, we look at the moguls of this group, close to 450 funds. It is estimated that this group has its hands on most of the hedge fund industry’s total asset base, and by keeping an eye on their highest performing stock picks, we have deciphered a number of investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually 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).

Just as key, bullish insider trading sentiment is another way to break down the investments you’re interested in. There are lots of incentives for a bullish insider to downsize shares of his or her company, but just one, very obvious reason why they would behave bullishly. Various academic studies have demonstrated the useful potential of this method if investors understand where to look (learn more here).

Now, it’s important to take a glance at the recent action surrounding Molex Incorporated (NASDAQ:MOLX).

What have hedge funds been doing with Molex Incorporated (NASDAQ:MOLX)?

In preparation for this quarter, a total of 16 of the hedge funds we track held long positions in this stock, a change of 0% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were upping their stakes substantially.

Molex Incorporated (NASDAQ:MOLX)When looking at the hedgies we track, Chuck Royce’s Royce & Associates had the biggest position in Molex Incorporated (NASDAQ:MOLX), worth close to $223.5 million, accounting for 0.7% of its total 13F portfolio. The second largest stake is held by Edgar Wachenheim of Greenhaven Associates, with a $38.7 million position; 1.1% of its 13F portfolio is allocated to the stock. Remaining hedgies that are bullish include Malcolm Fairbairn’s Ascend Capital, David Harding’s Winton Capital Management and Jim Simons’s Renaissance Technologies.

Since Molex Incorporated (NASDAQ:MOLX) has experienced a declination in interest from hedge fund managers, it’s easy to see that there exists a select few hedge funds that slashed their full holdings last quarter. At the top of the heap, William Michaelcheck’s Mariner Investment Group sold off the biggest investment of the “upper crust” of funds we monitor, worth close to $1.1 million in stock.. Phill Gross and Robert Atchinson’s fund, Adage Capital Management, also dropped its stock, about $0.7 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

What have insiders been doing with Molex Incorporated (NASDAQ:MOLX)?

Insider trading activity, especially when it’s bullish, is at its handiest when the company in focus has experienced transactions within the past six months. Over the last six-month time period, Molex Incorporated (NASDAQ:MOLX) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Molex Incorporated (NASDAQ:MOLX). These stocks are AVX Corporation (NYSE:AVX), Amphenol Corporation (NYSE:APH), LG Display Co Ltd. (ADR) (NYSE:LPL), Acuity Brands, Inc. (NYSE:AYI), and Dolby Laboratories, Inc. (NYSE:DLB). This group of stocks are the members of the diversified electronics industry and their market caps match MOLX’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
AVX Corporation (NYSE:AVX) 13 0 1
Amphenol Corporation (NYSE:APH) 17 0 15
LG Display Co Ltd. (ADR) (NYSE:LPL) 8 0 0
Acuity Brands, Inc. (NYSE:AYI) 17 0 4
Dolby Laboratories, Inc. (NYSE:DLB) 10 0 7

With the returns shown by the aforementioned studies, everyday investors must always watch hedge fund and insider trading activity, and Molex Incorporated (NASDAQ:MOLX) is an important part of this process.

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