To most stock holders, hedge funds are assumed to be underperforming, old financial tools of years past. While there are greater than 8000 funds trading today, we at Insider Monkey hone in on the aristocrats of this group, close to 450 funds. Most estimates calculate that this group oversees most of all hedge funds’ total capital, and by tracking their highest performing equity investments, we have found a few investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year 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 24 percentage points in 7 months (see all of our picks from August).
Just as key, optimistic insider trading sentiment is a second way to parse down the investments you’re interested in. Just as you’d expect, there are plenty of stimuli for a bullish insider to drop shares of his or her company, but only one, very clear reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the market-beating potential of this strategy if investors understand where to look (learn more here).
With these “truths” under our belt, let’s take a peek at the latest action regarding Cabot Microelectronics Corporation (NASDAQ:CCMP).
What does the smart money think about Cabot Microelectronics Corporation (NASDAQ:CCMP)?
In preparation for this year, a total of 5 of the hedge funds we track were long in this stock, a change of -17% from the third quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their stakes considerably.
When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the most valuable position in Cabot Microelectronics Corporation (NASDAQ:CCMP). Royce & Associates has a $110.4 million position in the stock, comprising 0.4% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, managed by Jim Simons, which held a $8 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other peers that hold long positions include John Overdeck and David Siegel’s Two Sigma Advisors, Mike Vranos’s Ellington and Ken Griffin’s Citadel Investment Group.
Judging by the fact that Cabot Microelectronics Corporation (NASDAQ:CCMP) has experienced falling interest from the entirety of the hedge funds we track, we can see that there were a few funds that decided to sell off their entire stakes last quarter. It’s worth mentioning that Paul Tudor Jones’s Tudor Investment Corp dropped the biggest stake of the “upper crust” of funds we monitor, worth about $0.3 million in stock.. Cliff Asness’s fund, AQR Capital Management, also dropped its stock, about $0.2 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds last quarter.
What have insiders been doing with Cabot Microelectronics Corporation (NASDAQ:CCMP)?
Insider purchases made by high-level executives is best served when the company in question has seen transactions within the past half-year. Over the latest half-year time frame, Cabot Microelectronics Corporation (NASDAQ:CCMP) has seen zero unique insiders purchasing, and 13 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Cabot Microelectronics Corporation (NASDAQ:CCMP). These stocks are Diodes Incorporated (NASDAQ:DIOD), EZchip Semiconductor Ltd. (NASDAQ:EZCH), InvenSense Inc (NYSE:INVN), OmniVision Technologies, Inc. (NASDAQ:OVTI), and TriQuint Semiconductor (NASDAQ:TQNT). This group of stocks are the members of the semiconductor – integrated circuits industry and their market caps are closest to CCMP’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Diodes Incorporated (NASDAQ:DIOD) | 7 | 0 | 0 |
| EZchip Semiconductor Ltd. (NASDAQ:EZCH) | 7 | 0 | 0 |
| InvenSense Inc (NYSE:INVN) | 11 | 0 | 6 |
| OmniVision Technologies, Inc. (NASDAQ:OVTI) | 17 | 0 | 2 |
| TriQuint Semiconductor (NASDAQ:TQNT) | 12 | 5 | 1 |
With the results shown by Insider Monkey’s time-tested strategies, everyday investors should always pay attention to hedge fund and insider trading activity, and Cabot Microelectronics Corporation (NASDAQ:CCMP) is no exception.
