Kulicke and Soffa Industries Inc. (KLIC): Are Hedge Funds Right About This Stock?

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Kulicke and Soffa Industries Inc. (NASDAQ:KLIC) was in 24 hedge funds’ portfolio at the end of the first quarter of 2013. KLIC has experienced an increase in enthusiasm from smart money lately. There were 22 hedge funds in our database with KLIC holdings at the end of the previous quarter.

According to most investors, hedge funds are assumed to be worthless, old investment vehicles of the past. While there are more than 8000 funds with their doors open today, we at Insider Monkey look at the aristocrats of this club, around 450 funds. Most estimates calculate that this group oversees the lion’s share of the hedge fund industry’s total asset base, and by paying attention to their top picks, we have deciphered a number of investment strategies that have historically beaten the market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum 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 topped the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Kulicke and Soffa Industries Inc. (NASDAQ:KLIC)Equally as important, optimistic insider trading activity is a second way to break down the world of equities. There are plenty of incentives for a bullish insider to cut shares of his or her company, but only one, very obvious reason why they would buy. Various empirical studies have demonstrated the impressive potential of this strategy if “monkeys” know what to do (learn more here).

Now, we’re going to take a glance at the latest action encompassing Kulicke and Soffa Industries Inc. (NASDAQ:KLIC).

How have hedgies been trading Kulicke and Soffa Industries Inc. (NASDAQ:KLIC)?

Heading into Q2, a total of 24 of the hedge funds we track held long positions in this stock, a change of 9% from the first quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their holdings meaningfully.

When looking at the hedgies we track, Jim Simons’s Renaissance Technologies had the biggest position in Kulicke and Soffa Industries Inc. (NASDAQ:KLIC), worth close to $30.7 million, comprising 0.1% of its total 13F portfolio. The second largest stake is held by Chuck Royce of Royce & Associates, with a $15.8 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining hedge funds that hold long positions include Clint Carlson’s Carlson Capital, David Dreman’s Dreman Value Management and Clint Coghill’s Coghill Capital Management.

As industrywide interest jumped, key hedge funds were breaking ground themselves. Highbridge Capital Management, managed by Glenn Russell Dubin, established the most valuable position in Kulicke and Soffa Industries Inc. (NASDAQ:KLIC). Highbridge Capital Management had 2.8 million invested in the company at the end of the quarter. Joshua Berkowitz’s Woodbine Capital also made a $1.4 million investment in the stock during the quarter. The other funds with brand new KLIC positions are Matthew Tewksbury’s Stevens Capital Management, Wojciech Uzdelewicz’s Espalier Global Management, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners.

What have insiders been doing with Kulicke and Soffa Industries Inc. (NASDAQ:KLIC)?

Bullish insider trading is most useful when the company in question has seen transactions within the past half-year. Over the latest six-month time period, Kulicke and Soffa Industries Inc. (NASDAQ:KLIC) has experienced zero unique insiders purchasing, and 8 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 Kulicke and Soffa Industries Inc. (NASDAQ:KLIC). These stocks are Entegris Inc (NASDAQ:ENTG), Brooks Automation, Inc. (USA) (NASDAQ:BRKS), Ultratech, Inc. (NASDAQ:UTEK), ATMI Inc (NASDAQ:ATMI), and Tessera Technologies, Inc. (NASDAQ:TSRA). This group of stocks are the members of the semiconductor equipment & materials industry and their market caps are similar to KLIC’s market cap.

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