The market has been volatile as the Federal Reserve winds down its easy money policies. Small cap stocks have been hit hard as a result, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF (SPY) by more than 14 percentage points between June 25th and the end of October. SEC filings and hedge fund investor letters indicate that the smart money seems to be paring back their overall long exposure, and the funds’ movements is one of the reasons why the major indexes have retraced. In this article, we analyze what the smart money thinks of IXYS Corporation (NASDAQ:IXYS) and find out how it is affected by hedge funds’ moves.
IXYS Corporation (NASDAQ:IXYS) investors should be aware of a decrease in enthusiasm from smart money lately. IXYS Corporation (NASDAQ:IXYS) was in 12 hedge funds’ portfolios at the end of the third quarter of 2015. There were 16 hedge funds in our database with IXYS Corporation (NASDAQ:IXYS) positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Lumber Liquidators Holdings Inc (NYSE:LL), Titan International Inc (NYSE:TWI), and Hometrust Bancshares Inc (NASDAQ:HTBI) to gather more data points.
To the average investor, there are plenty of metrics that stock traders employ to value their stock investments. Two of the best metrics are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the best picks of the best investment managers can outpace the market by a significant margin (see the details here).
Keeping this in mind, we’re going to check out the new action surrounding IXYS Corporation (NASDAQ:IXYS).
What does the smart money think about IXYS Corporation (NASDAQ:IXYS)?
Heading into Q4, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 25% from the previous quarter. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Chuck Royce’s Royce & Associates has the number one position in IXYS Corporation (NASDAQ:IXYS), worth close to $19.6 million, amounting to 0.1% of its total 13F portfolio. Coming in second is Renaissance Technologies, with a $2.7 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Some other hedge funds and institutional investors that hold long positions encompass David Dreman’s Dreman Value Management, Ken Fisher’s Fisher Asset Management and Cliff Asness’ AQR Capital Management.
Judging by the fact that IXYS Corporation (NASDAQ:IXYS) has faced a declination in interest from the aggregate hedge fund industry, it’s easy to see that there lies a certain “tier” of funds that elected to cut their full holdings in the third quarter. Intriguingly, Israel Englander’s Millennium Management said goodbye to the largest investment of the “upper crust” of funds followed by Insider Monkey, comprising an estimated $2.2 million in stock. Ken Griffin’s fund, Citadel Investment Group, also dumped its stock, about $1 million worth of shares. These moves are interesting, as aggregate hedge fund interest dropped by 4 funds in the third quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as IXYS Corporation (NASDAQ:IXYS) but similarly valued. These stocks are Lumber Liquidators Holdings Inc (NYSE:LL), Titan International Inc (NYSE:TWI), Hometrust Bancshares Inc (NASDAQ:HTBI), and Kimball International Inc (NASDAQ:KBAL). This group of stocks’ market valuations matches IXYS Corporation (NASDAQ:IXYS)’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see, these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $45 million. That figure was $33 million in IXYS Corporation (NASDAQ:IXYS)’s case. Titan International Inc (NYSE:TWI) is the most popular stock in this table. On the other hand, Hometrust Bancshares Inc (NASDAQ:HTBI) is the least popular one with only 9 bullish hedge fund positions. IXYS Corporation (NASDAQ:IXYS) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Titan International Inc (NYSE:TWI) might be a better candidate to consider a long position.