Is Synaptics, Incorporated (SYNA) Going to Burn These Hedge Funds?

Synaptics, Incorporated (NASDAQ:SYNA) was in 11 hedge funds’ portfolio at the end of the first quarter of 2013. SYNA has experienced an increase in support from the world’s most elite money managers recently. There were 10 hedge funds in our database with SYNA positions at the end of the previous quarter.

In the eyes of most investors, hedge funds are seen as worthless, outdated financial tools of yesteryear. While there are over 8000 funds trading at the moment, we look at the aristocrats of this club, close to 450 funds. It is widely believed that this group controls the majority of the hedge fund industry’s total asset base, and by watching their best picks, we have unsheathed a few investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outpaced 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 (see all of our picks from August).

Just as key, optimistic insider trading sentiment is a second way to break down the world of equities. Just as you’d expect, there are plenty of reasons for an upper level exec to drop shares of his or her company, but just one, very simple reason why they would initiate a purchase. Several academic studies have demonstrated the market-beating potential of this tactic if “monkeys” understand where to look (learn more here).

With all of this in mind, it’s important to take a glance at the key action encompassing Synaptics, Incorporated (NASDAQ:SYNA).

How are hedge funds trading Synaptics, Incorporated (NASDAQ:SYNA)?

At Q1’s end, a total of 11 of the hedge funds we track were bullish in this stock, a change of 10% from the previous quarter. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes considerably.

When looking at the hedgies we track, Jim Simons’s Renaissance Technologies had the most valuable position in Synaptics, Incorporated (NASDAQ:SYNA), worth close to $21 million, accounting for 0.1% of its total 13F portfolio. Coming in second is Ken Griffin of Citadel Investment Group, with a $18.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedgies that are bullish include D. E. Shaw’s D E Shaw, Mark Kingdon’s Kingdon Capital and John Overdeck and David Siegel’s Two Sigma Advisors.

As one would reasonably expect, some big names were breaking ground themselves. Two Sigma Advisors, managed by John Overdeck and David Siegel, initiated the most valuable position in Synaptics, Incorporated (NASDAQ:SYNA). Two Sigma Advisors had 2.8 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also made a $1.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Jeffrey Vinik’s Vinik Asset Management and Paul Tudor Jones’s Tudor Investment Corp.

How have insiders been trading Synaptics, Incorporated (NASDAQ:SYNA)?

Insider purchases made by high-level executives is most useful when the company in focus has seen transactions within the past half-year. Over the last half-year time period, Synaptics, Incorporated (NASDAQ:SYNA) has experienced zero unique insiders buying, and 9 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Synaptics, Incorporated (NASDAQ:SYNA). These stocks are Stratasys, Ltd. (NASDAQ:SSYS), Nice Systems Ltd (ADR) (NASDAQ:NICE), Electronics For Imaging, Inc. (NASDAQ:EFII), Logitech International SA (USA) (NASDAQ:LOGI), and Universal Display Corporation (NASDAQ:PANL). This group of stocks are in the computer peripherals industry and their market caps resemble SYNA’s market cap.