NeoPhotonics Corp (NYSE:NPTN) investors should be aware of a decrease in hedge fund sentiment of late.
To the average investor, there are a multitude of indicators market participants can use to monitor publicly traded companies. A couple of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best fund managers can beat their index-focused peers by a solid amount (see just how much).
Just as beneficial, positive insider trading activity is another way to parse down the stock market universe. Just as you’d expect, there are many reasons for an insider to cut shares of his or her company, but only one, very clear reason why they would behave bullishly. Many academic studies have demonstrated the market-beating potential of this tactic if you understand what to do (learn more here).
Now, we’re going to take a look at the key action encompassing NeoPhotonics Corp (NYSE:NPTN).
How have hedgies been trading NeoPhotonics Corp (NYSE:NPTN)?
At the end of the fourth quarter, a total of 5 of the hedge funds we track were bullish in this stock, a change of -17% from the third quarter. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were boosting their stakes significantly.
When looking at the hedgies we track, Chilton Investment Company, managed by Richard Chilton, holds the largest position in NeoPhotonics Corp (NYSE:NPTN). Chilton Investment Company has a $5.4 million position in the stock, comprising 0.1% of its 13F portfolio. On Chilton Investment Company’s heels is Royce & Associates, managed by Chuck Royce, which held a $4.7 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining hedgies with similar optimism include D. E. Shaw’s D E Shaw, Jim Simons’s Renaissance Technologies and Israel Englander’s Millennium Management.
Because NeoPhotonics Corp (NYSE:NPTN) has faced falling interest from the smart money, it’s safe to say that there is a sect of hedge funds who were dropping their entire stakes last quarter. At the top of the heap, Bain Capital’s Brookside Capital cut the largest stake of the “upper crust” of funds we monitor, worth close to $0.7 million in stock.. Gregory Fraser, Rudolph Kluiber, and Timothy Kroch’s fund, GRT Capital Partners, also dumped its stock, about $0.1 million worth. These moves are interesting, as total hedge fund interest dropped by 1 funds last quarter.
How have insiders been trading NeoPhotonics Corp (NYSE:NPTN)?
Insider purchases made by high-level executives is at its handiest when the company in question has experienced transactions within the past six months. Over the last half-year time period, NeoPhotonics Corp (NYSE:NPTN) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to NeoPhotonics Corp (NYSE:NPTN). These stocks are Kopin Corporation (NASDAQ:KOPN), Alliance Fiber Optic Products Inc (NASDAQ:AFOP), API Technologies Corp (NASDAQ:ATNY), GSI Technology, Inc. (NASDAQ:GSIT), and LDK Solar Co., Ltd (ADR) (NYSE:LDK). All of these stocks are in the semiconductor – broad line industry and their market caps resemble NPTN’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Kopin Corporation (NASDAQ:KOPN)||4||0||0|
|Alliance Fiber Optic Products Inc (NASDAQ:AFOP)||1||0||5|
|API Technologies Corp (NASDAQ:ATNY)||7||2||2|
|GSI Technology, Inc. (NASDAQ:GSIT)||7||0||1|
|LDK Solar Co., Ltd (ADR) (NYSE:LDK)||4||0||0|
With the returns shown by the aforementioned studies, retail investors must always keep an eye on hedge fund and insider trading sentiment, and NeoPhotonics Corp (NYSE:NPTN) is no exception.