Is Microsemi Corporation (NASDAQ:MSCC) Going to Burn These Hedge Funds?

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Microsemi Corporation (NASDAQ:MSCC) has seen an increase in enthusiasm from smart money lately.

In the eyes of most shareholders, hedge funds are seen as unimportant, old investment tools of the past. While there are over 8000 funds with their doors open at the moment, we at Insider Monkey choose to focus on the crème de la crème of this group, about 450 funds. It is estimated that this group oversees most of the smart money’s total asset base, and by paying attention to their highest performing picks, we have found a few 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 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 (check out a sample of our picks).

Just as beneficial, optimistic insider trading activity is another way to break down the world of equities. Obviously, there are a variety of stimuli for an upper level exec to cut shares of his or her company, but just one, very simple reason why they would buy. Many academic studies have demonstrated the market-beating potential of this tactic if shareholders know where to look (learn more here).

Keeping this in mind, let’s take a glance at the key action encompassing Microsemi Corporation (NASDAQ:MSCC).

What does the smart money think about Microsemi Corporation (NASDAQ:MSCC)?

Heading into Q2, a total of 6 of the hedge funds we track were bullish in this stock, a change of 20% from one quarter earlier. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were boosting their stakes significantly.


When looking at the hedgies we track, Ken Griffin’s Citadel Investment Group had the biggest position in Microsemi Corporation (NASDAQ:MSCC), worth close to $43.1 million, comprising 0.1% of its total 13F portfolio. Coming in second is David Dreman of Dreman Value Management, with a $40.1 million position; 1.1% of its 13F portfolio is allocated to the company. Other hedgies that are bullish include Mariko Gordon’s Daruma Asset Management, D. E. Shaw’s D E Shaw and John Overdeck and David Siegel’s Two Sigma Advisors.

Now, some big names have jumped into Microsemi Corporation (NASDAQ:MSCC) headfirst. Daruma Asset Management, managed by Mariko Gordon, created the most valuable position in Microsemi Corporation (NASDAQ:MSCC). Daruma Asset Management had 36.9 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also initiated a $1.9 million position during the quarter. The only other fund with a brand new MSCC position is John Overdeck and David Siegel’s Two Sigma Advisors.

Insider trading activity in Microsemi Corporation (NASDAQ:MSCC)

Insider purchases made by high-level executives is most useful when the primary stock in question has experienced transactions within the past 180 days. Over the last 180-day time period, Microsemi Corporation (NASDAQ:MSCC) has seen zero unique insiders buying, and 9 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 Microsemi Corporation (NASDAQ:MSCC). These stocks are RF Micro Devices, Inc. (NASDAQ:RFMD), Fairchild Semiconductor Intl Inc (NYSE:FCS), Semiconductor Manufacturing Int’l (ADR) (NYSE:SMI), Semtech Corporation (NASDAQ:SMTC), and Hittite Microwave Corp (NASDAQ:HITT). This group of stocks are in the semiconductor – integrated circuits industry and their market caps are closest to MSCC’s market cap.

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