Micron Technology, Inc. (NASDAQ:MU) is one of the stocks that’s changing hands the most on this Friday, as it currently sits at ninth on the U.S. market’s volume chart, and shares are up 0.38% on the day. This is important to note because, while interest in Micron has been high, the stock has experienced an increase in hedge fund sentiment in recent months.
To most investors, hedge funds are seen as unimportant, old financial vehicles of years past. While there are greater than 8000 funds trading at present, we hone in on the masters of this group, around 450 funds. Most estimates calculate that this group controls most of the hedge fund industry’s total asset base, and by watching their top equity investments, we have brought to light a number of 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 per 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 beaten the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Just as key, optimistic insider trading sentiment is another way to parse down the world of equities. Just as you’d expect, there are plenty of incentives for a bullish insider to drop shares of his or her company, but only one, very simple reason why they would initiate a purchase. Various academic studies have demonstrated the valuable potential of this strategy if “monkeys” know what to do (learn more here).
Now, it’s important to take a look at the recent action surrounding Micron Technology, Inc. (NASDAQ:MU).
What have hedge funds been doing with Micron Technology, Inc. (NASDAQ:MU)?
At the end of the fourth quarter, a total of 31 of the hedge funds we track held long positions in this stock, a change of 11% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their holdings meaningfully.
According to our comprehensive database, Orbis Investment Management, managed by William B. Gray, holds the biggest position in Micron Technology, Inc. (NASDAQ:MU). Orbis Investment Management has a $797 million position in the stock, comprising 7.9% of its 13F portfolio. The second largest stake is held by Richard Chilton of Chilton Investment Company, with a $58 million position; 0.7% of its 13F portfolio is allocated to the company. Other hedgies with similar optimism include Jim Simons’s Renaissance Technologies, Kerr Neilson’s Platinum Asset Management and Charles Clough’s Clough Capital Partners.
Now, key hedge funds were leading the bulls’ herd. CR Intrinsic Investors, managed by SAC Subsidiary, assembled the biggest position in Micron Technology, Inc. (NASDAQ:MU). CR Intrinsic Investors had 16 million invested in the company at the end of the quarter. George Soros’s Soros Fund Management also made a $9 million investment in the stock during the quarter. The following funds were also among the new MU investors: Daniel S. Och’s OZ Management, Michael Johnston’s Steelhead Partners, and Glenn Russell Dubin’s Highbridge Capital Management.
What have insiders been doing with Micron Technology, Inc. (NASDAQ:MU)?
Insider purchases made by high-level executives is most useful when the primary stock in question has seen transactions within the past 180 days. Over the latest six-month time period, Micron Technology, Inc. (NASDAQ:MU) has experienced zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Micron Technology, Inc. (NASDAQ:MU). These stocks are Netlist, Inc. (NASDAQ:NLST), SemiLEDs Corporation (NASDAQ:LEDS), Integrated Silicon Solution, Inc. (NASDAQ:ISSI), Rambus Inc. (NASDAQ:RMBS), and Spansion Inc. (NYSE:CODE). This group of stocks are the members of the semiconductor- memory chips industry and their market caps are similar to MU’s market cap.
Here’s the table. Check it out for yourself: