Is ASML Holding N.V. (ADR) (NASDAQ:ASML) a buy right now? Money managers are turning less bullish. The number of long hedge fund positions retreated by 6 recently.
In the eyes of most stock holders, hedge funds are viewed as slow, outdated financial vehicles of the past. While there are greater than 8000 funds with their doors open today, we at Insider Monkey choose to focus on the leaders of this club, around 450 funds. It is estimated that this group has its hands on most of all hedge funds’ total asset base, and by watching their best investments, we have spotted a number of investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy beat 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 25 percentage points in 6.5 month (check out a sample of our picks).
Just as integral, bullish insider trading sentiment is a second way to parse down the investments you’re interested in. Just as you’d expect, there are a variety of stimuli for a bullish insider to get rid of shares of his or her company, but just one, very clear reason why they would buy. Many academic studies have demonstrated the useful potential of this method if investors know what to do (learn more here).
With all of this in mind, it’s important to take a look at the latest action surrounding ASML Holding N.V. (ADR) (NASDAQ:ASML).
What does the smart money think about ASML Holding N.V. (ADR) (NASDAQ:ASML)?
In preparation for this year, a total of 13 of the hedge funds we track were bullish in this stock, a change of -32% from the third quarter. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their holdings significantly.
Of the funds we track, Fisher Asset Management, managed by Ken Fisher, holds the largest position in ASML Holding N.V. (ADR) (NASDAQ:ASML). Fisher Asset Management has a $86 million position in the stock, comprising 0.2% of its 13F portfolio. Sitting at the No. 2 spot is Firefly Value Partners, managed by Ryan Heslop and Ariel Warszawski, which held a $59 million position; the fund has 8.8% of its 13F portfolio invested in the stock. Remaining peers that are bullish include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Jim Simons’s Renaissance Technologies and Matthew Iorio’s White Elm Capital.
Because ASML Holding N.V. (ADR) (NASDAQ:ASML) has faced declining sentiment from the aggregate hedge fund industry, it’s safe to say that there were a few money managers who were dropping their positions entirely heading into 2013. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital cut the largest position of the 450+ funds we track, worth close to $131 million in stock.. Ken Fisher’s fund, Fisher Asset Management, also sold off its stock, about $95 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 6 funds heading into 2013.
What do corporate executives and insiders think about ASML Holding N.V. (ADR) (NASDAQ:ASML)?
Bullish insider trading is best served when the primary stock in question has experienced transactions within the past six months. Over the last six-month time frame, ASML Holding N.V. (ADR) (NASDAQ:ASML) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to ASML Holding N.V. (ADR) (NASDAQ:ASML). These stocks are Advanced Semiconductor Engineering (ADR) (NYSE:ASX), Cree, Inc. (NASDAQ:CREE), Lam Research Corporation (NASDAQ:LRCX), KLA-Tencor Corporation (NASDAQ:KLAC), and Applied Materials, Inc. (NASDAQ:AMAT). This group of stocks belong to the semiconductor equipment & materials industry and their market caps are similar to ASML’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Advanced Semiconductor Engineering (ADR) (NYSE:ASX) | 8 | 0 | 0 |
| Cree, Inc. (NASDAQ:CREE) | 16 | 1 | 2 |
| Lam Research Corporation (NASDAQ:LRCX) | 20 | 0 | 1 |
| KLA-Tencor Corporation (NASDAQ:KLAC) | 23 | 0 | 8 |
| Applied Materials, Inc. (NASDAQ:AMAT) | 24 | 2 | 7 |
With the returns demonstrated by the aforementioned strategies, retail investors must always keep an eye on hedge fund and insider trading activity, and ASML Holding N.V. (ADR) (NASDAQ:ASML) shareholders fit into this picture quite nicely.
