STMicroelectronics N.V. (ADR) (STM): Are Hedge Funds Right About This Stock?

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STMicroelectronics N.V. (ADR) (NYSE:STM) was in 9 hedge funds’ portfolio at the end of the fourth quarter of 2012. STM has experienced an increase in support from the world’s most elite money managers lately. There were 8 hedge funds in our database with STM holdings at the end of the previous quarter.

STMicroelectronics N.V. (ADR) (NYSE:STM)

In today’s marketplace, there are many methods investors can use to monitor stocks. Some of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top money managers can outperform the market by a solid margin (see just how much).

Equally as important, bullish insider trading sentiment is another way to break down the world of equities. Obviously, there are many stimuli for an upper level exec to downsize shares of his or her company, but only one, very clear reason why they would behave bullishly. Many academic studies have demonstrated the useful potential of this tactic if piggybackers know what to do (learn more here).

Now, it’s important to take a glance at the key action surrounding STMicroelectronics N.V. (ADR) (NYSE:STM).

How have hedgies been trading STMicroelectronics N.V. (ADR) (NYSE:STM)?

At the end of the fourth quarter, a total of 9 of the hedge funds we track were bullish in this stock, a change of 13% from one quarter earlier. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were upping their stakes meaningfully.

Of the funds we track, William B. Gray’s Orbis Investment Management had the biggest position in STMicroelectronics N.V. (ADR) (NYSE:STM), worth close to $50.6 million, comprising 0.5% of its total 13F portfolio. The second largest stake is held by Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $28.4 million position; 0.1% of its 13F portfolio is allocated to the company. Some other peers with similar optimism include Phill Gross and Robert Atchinson’s Adage Capital Management, David Costen Haley’s HBK Investments and Ken Griffin’s Citadel Investment Group.

Now, key hedge funds were breaking ground themselves. Adage Capital Management, managed by Phill Gross and Robert Atchinson, established the largest position in STMicroelectronics N.V. (ADR) (NYSE:STM). Adage Capital Management had 3.3 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also initiated a $0.7 million position during the quarter.

Insider trading activity in STMicroelectronics N.V. (ADR) (NYSE:STM)

Bullish insider trading is particularly usable when the company in question has experienced transactions within the past 180 days. Over the last half-year time frame, STMicroelectronics N.V. (ADR) (NYSE:STM) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to STMicroelectronics N.V. (ADR) (NYSE:STM). These stocks are Freescale Semiconductor Ltd (NYSE:FSL), AU Optronics Corp. (ADR) (NYSE:AUO), Maxim Integrated Products Inc. (NASDAQ:MXIM), Avago Technologies Ltd (NASDAQ:AVGO), and NXP Semiconductors NV (NASDAQ:NXPI). This group of stocks are the members of the semiconductor – broad line industry and their market caps are closest to STM’s market cap.

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