Is Silicon Laboratories (NASDAQ:SLAB) the right investment to pursue these days? Investors who are in the know are becoming less confident. The number of long hedge fund bets stayed the same which is a slightly negative development in our experience
In the 21st century investor’s toolkit, there are tons of gauges market participants can use to monitor the equity markets. Two of the best are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite money managers can outperform their index-focused peers by a very impressive amount (see just how much).
Just as beneficial, positive insider trading activity is a second way to break down the stock market universe. Just as you’d expect, there are many reasons for an upper level exec to get rid of shares of his or her company, but only one, very clear reason why they would buy. Plenty of academic studies have demonstrated the impressive potential of this strategy if “monkeys” understand where to look (learn more here).
Now, it’s important to take a look at the recent action surrounding Silicon Laboratories (NASDAQ:SLAB).
What have hedge funds been doing with Silicon Laboratories (NASDAQ:SLAB)?
Heading into Q2, a total of 14 of the hedge funds we track were bullish in this stock, a change of 0% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their stakes meaningfully.
Of the funds we track, Citadel Investment Group, managed by Ken Griffin, holds the biggest position in Silicon Laboratories (NASDAQ:SLAB). Citadel Investment Group has a $69.5 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Panayotis Takis Sparaggis of Alkeon Capital Management, with a $68.5 million position; 1.5% of its 13F portfolio is allocated to the stock. Remaining peers with similar optimism include Phill Gross and Robert Atchinson’s Adage Capital Management, Clint Carlson’s Carlson Capital and Jim Simons’s Renaissance Technologies.
Because Silicon Laboratories (NASDAQ:SLAB) has faced a declination in interest from the smart money, it’s easy to see that there were a few money managers who were dropping their entire stakes heading into Q2. Interestingly, Philippe Laffont’s Coatue Management dropped the biggest investment of the “upper crust” of funds we track, worth about $33.9 million in stock.. Matthew Hulsizer’s fund, PEAK6 Capital Management, also cut its call options., about $0.7 million worth. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
What do corporate executives and insiders think about Silicon Laboratories (NASDAQ:SLAB)?
Bullish insider trading is best served when the company in focus has experienced transactions within the past six months. Over the last six-month time period, Silicon Laboratories (NASDAQ:SLAB) has experienced zero unique insiders buying, and 9 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Silicon Laboratories (NASDAQ:SLAB). These stocks are Himax Technologies, Inc. (ADR) (NASDAQ:HIMX), First Solar, Inc. (NASDAQ:FSLR), SolarCity Corp (NASDAQ:SCTY), Cirrus Logic, Inc. (NASDAQ:CRUS), and SunPower Corporation (NASDAQ:SPWR). This group of stocks are in the semiconductor – specialized industry and their market caps are similar to SLAB’s market cap.