Cavalry Asset Management was founded in 2003 and is managed by John Hurley. The fund mainly invests in technology stocks and, at the end of September, its equity portfolio was worth around $119.82 million, up from $92.3 million at the end of the previous quarter. According to our calculations, the fund returned 14.63% in the third quarter, based on its 15 long positions in companies with a market cap of $1 billion or more. Although this return may differ from the fund’s actual return, as we don’t count short positions and some other instruments it still helps us determine whether or not the fund’s investment skills are good enough for imitating.
Our approach reveals interesting facts about hedge funds’ stock picking skills. For instance, there were 659 hedge funds in our database that had at least five stakes in companies worth over $1.0 billion in their 13F portfolio. These hedge funds’ long portfolio managed to deliver an average return of 8.3% during the third quarter whereas S&P 500 ETFs returned only 3.3%.
Therefore, we are going to take a closer look at three companies from Cavalry Asset Management’s portfolio, including Monolithic Power Systems, Inc. (NASDAQ:MPWR), China Mobile Ltd. (ADR) (NYSE:CHL), and Applied Micro Circuits Corporation (NASDAQ:AMCC).
Let’s begin with Monolithic Power Systems, Inc. (NASDAQ:MPWR), in which Cavalry Asset Management lowered its stake by 35% to 55,413 shares worth $4.46 million during the third quarter. In the same period, the stock advanced by 18.1%. A total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6% from one quarter earlier. When looking at the institutional investors followed by Insider Monkey, Phill Gross and Robert Atchinson’s Adage Capital Management had the largest position in Monolithic Power Systems, Inc. (NASDAQ:MPWR), worth close to $74 million. The second largest stake was held by Carlson Capital, led by Clint Carlson, valued at $32.1 million. Other peers with similar optimism include Jim Simons’s Renaissance Technologies, Alex Sacerdote’s Whale Rock Capital Management and Charles Clough’s Clough Capital Partners.
In Applied Micro Circuits Corporation (NASDAQ:AMCC), Cavalry also cut its stake by 37% to 350,520 shares worth $2.44 million during the third quarter, after having raised it by 31% during the second one. The stock appreciated by 8.4% between July and September. Heading into the third quarter of 2016, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, up by 8% over the quarter. Among these funds, Kingdom Ridge Capital held the most valuable stake in Applied Micro Circuits Corporation (NASDAQ:AMCC), which was worth $50.8 million at the end of the second quarter. On the second spot was White Elm Capital, which amassed $23.8 million worth of shares. Moreover, Renaissance Technologies, and Millennium Management were also bullish on Applied Micro Circuits Corporation (NASDAQ:AMCC).
In China Mobile Ltd. (ADR) (NYSE:CHL), Cavalry Asset Management raised its stake by 31% and by 10% in the second and third quarters respectively. In this way, the fund disclosed a $4.64 million position containing 75,449 shares as of the end of September. Meanwhile, the stock gained 7.9% during the second quarter. The number of funds from our database long China Mobile declined by 8% to 23 during the second quarter. The largest stake in China Mobile Ltd. (ADR) (NYSE:CHL) was held by Renaissance Technologies, which reported holding $106.4 million worth of stock as of the end of June. It was followed by Arrowstreet Capital with a $83.4 million position. Other investors bullish on the company included Indus Capital, Ariel Investments, and Canyon Capital Advisors.
On the other hand, Cavalry decided to unload its entire stake in Silicon Motion Technology Corp. (ADR) (NASDAQ:SIMO) during the third quarter, selling 83,181 shares it had reported as of the end of June. The position was closed as the company’s shares rose by 8.7% during the July-September period. There were 21 funds tracked by Insider Monkey bullish on Silicon Motion Technology at the end of June, unchanged over the quarter. Among these funds, Columbus Circle Investors held the most valuable stake in Silicon Motion Technology Corp. (ADR) (NASDAQ:SIMO), which was worth $36.6 million at the end of the second quarter. On the second spot was Cardinal Capital, which amassed $26.9 million worth of shares. Moreover, Driehaus Capital, Arrowstreet Capital, and Polar Capital were also bullish on Silicon Motion Technology Corp. (ADR) (NASDAQ:SIMO).