Is Exar Corporation (EXAR) Worthy of Your Portfolio?

Because Exar Corporation (NASDAQ:EXAR) has gone through declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there lies a certain “tier” of hedge funds that slashed their entire stakes between July and September. At the top of the heap, Michael Murphy and Daniel Donoghue’s Discovery Group dumped the largest position of the 700 funds monitored by Insider Monkey, totaling about $1.8 million in stock. Peter A. Wright’s fund, P.A.W. CAPITAL PARTNERS, also said goodbye to its stock, about $0.8 million worth.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Exar Corporation (NASDAQ:EXAR) but similarly valued. We will take a look at Timkensteel Corp (NYSE:TMST), Harmonic Inc (NASDAQ:HLIT), Sierra Wireless, Inc. (USA) (NASDAQ:SWIR), and Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH). This group of stocks’ market valuations match EXAR’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TMST 12 42182 -7
HLIT 9 69289 1
SWIR 8 3565 2
RUTH 17 31847 1

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $37 million, which is lower than the $74 million figure in EXAR’s case. Ruth’s Hospitality Group, Inc. (NASDAQ:RUTH) is the most popular stock in this table. On the other hand Sierra Wireless, Inc. (USA) (NASDAQ:SWIR) is the least popular one with only eight funds having reported long positions. Exar Corporation (NASDAQ:EXAR) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard RUTH might be a better candidate to consider taking a long position in.

Disclosure: none