Should You Avoid Flextronics International Ltd. (FLEX)?

Page 1 of 2

Is Flextronics International Ltd. (NASDAQ:FLEX) a good investment?

In the eyes of many of your fellow readers, hedge funds are viewed as bloated, old investment vehicles of a forgotten age. Although there are over 8,000 hedge funds with their doors open today, this site focuses on the leaders of this club, around 525 funds. Analysts calculate that this group has its hands on most of the smart money’s total capital, and by tracking their highest performing investments, we’ve found a few investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we‘ve began to sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).

Just as necessary, bullish insider trading activity is a second way to look at the investments you’re interested in. Obviously, there are many stimuli for an upper level exec to sell shares of his or her company, but only one, very clear reason why they would behave bullishly. Various academic studies have demonstrated the valuable potential of this strategy if you understand where to look (learn more here).

Flextronics International Ltd. (NASDAQ:FLEX)

What’s more, it’s important to examine the recent info for Flextronics International Ltd. (NASDAQ:FLEX).

What does the smart money think about Flextronics International Ltd. (NASDAQ:FLEX)?

At the end of the second quarter, a total of 16 of the hedge funds we track were long in this stock, a change of -16% 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 boosting their holdings meaningfully.

Out of the hedge funds we follow, Glenview Capital, managed by Larry Robbins, holds the largest position in Flextronics International Ltd. (NASDAQ:FLEX). Glenview Capital has a $457.3 million position in the stock, comprising 4.2% of its 13F portfolio. On Glenview Capital’s heels is GMT Capital, managed by Thomas E. Claugus, which held a $133.4 million position; 3.1% of its 13F portfolio is allocated to the company. Other hedge funds that hold long positions include Cliff Asness’s AQR Capital Management, Ken Griffin’s Citadel Investment Group and Ron Gutfleish’s Elm Ridge Capital.

Because Flextronics International Ltd. (NASDAQ:FLEX) has faced declining interest from the top-tier hedge fund industry, it’s easy to see that there is a sect of hedge funds that decided to sell off their positions entirely last quarter. Interestingly, Neil Chriss’s Hutchin Hill Capital said goodbye to the largest investment of the “upper crust” of funds we track, totaling about $4.2 million in stock, and Ray Dalio of Bridgewater Associates was right behind this move, as the fund dumped about $1.8 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 3 funds last quarter.

Insider trading activity in Flextronics International Ltd. (NASDAQ:FLEX)

Bullish insider trading is particularly usable when the company in focus has experienced transactions within the past 180 days. Over the latest six-month time period, Flextronics International Ltd. (NASDAQ:FLEX) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators in other stocks similar to Flextronics International Ltd. (NASDAQ:FLEX). These stocks are Plexus Corp. (NASDAQ:PLXS), Benchmark Electronics, Inc. (NYSE:BHE), Raven Industries, Inc. (NASDAQ:RAVN), Celestica Inc. (USA) (NYSE:CLS), and Jabil Circuit, Inc. (NYSE:JBL). This group of stocks are the members of the printed circuit boards industry and their market caps match FLEX’s market cap.

Page 1 of 2