Semiconductor Stocks Have Big Day, Rebound From Last Week’s Slump

The semiconductor industry has launched a bit of a comeback today, as most of the semiconductor companies have witnessed an increase in their share price on heavy trading volume today. The list includes major players including Intel Corporation (NASDAQ:INTC), Micron Technology, Inc. (NASDAQ:MU), and Advanced Micro Devices, Inc. (NASDAQ:AMD), which we’ll look at in this article, as well as Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), which gained just under 1% today. The shares of Intel Corporation are trading 1.33% higher at $30.59, whereas Micron Technology’s shares are up 1.46%. Advanced Micro Devices is leading the way at a 3.93% increase in its share price, to $2.52.

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It is well-known that hedge funds have under-performed the S&P 500 based on net returns over the past several years. But we are missing something very important here. Hedge funds generally pull in strong returns from their top small-cap stocks and invest a lot of their resources into analyzing these stocks. They simply don’t take large enough positions in them relative to their portfolios to generate strong overall returns because their large-cap picks underperform the market. We share the top 15 small-cap stocks favored by the best hedge fund managers every quarter and this strategy has managed to outperform the S&P 500 every year since it was launched in August 2012, returning over 135% and beating the market by more than 80 percentage points (read the details). Because of this, we know that collective hedge fund sentiment is extremely telling and valuable.

Earlier today, Intel Corporation (NASDAQ:INTC) announced some upper management changes, including the departure of its president, Renee James. Further, the McAfee division of the chipmaker will work under the Intel Security organization and the leadership of Chris Young, Intel’s General Manager. While discussing these management changes, Brian Krzanich, CEO of Intel Corporation, said, “We are aligning our leadership structure to continue to become more efficient in order to deliver the benefits of our strategy even faster than before.” Smart money has been somewhat bearish towards Intel Corporation (NASDAQ:INTC) of late, as hedge funds reduced their investments marginally to $5.21 billion by the end of the first quarter, from $5.45 billion in holdings one quarter previously. Total investors with positions also dropped slightly during this time, to 61 from 62. Jean-Marie Eveillard of First Eagle Investment Management held a large position in the chipmaker of 28.84 million shares with a market value of $901.95 million. However, we need to take into account the drop of 16.81% in the shares of Intel Corporation year-to-date. The world’s largest chipmaker is suffering because of an ailing PC industry but is looking for growth opportunities in other areas. Its recent acquisition of Altera Corporation (NASDAQ:ALTR) will help the company gain exposure in multiple markets, from communications to consumer electronics.