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United Microelectronics Corp (ADR) (UMC): Hedge Fund and Insider Sentiment Unchanged, What Should You Do?

Is United Microelectronics Corp (ADR) (NYSE:UMC) a good investment?

In today’s marketplace, there are dozens of metrics shareholders can use to analyze their holdings. A duo of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best money managers can outclass their index-focused peers by a solid amount (see just how much).

Just as necessary, bullish insider trading activity is another way to analyze the world of equities. As the old adage goes: there are many stimuli for a bullish insider to downsize shares of his or her company, but only one, very simple reason why they would behave bullishly. Several academic studies have demonstrated the impressive potential of this strategy if investors know where to look (learn more here).

United Microelectronics Corp (ADR) (NYSE:UMC)

Thus, we’re going to discuss the newest info surrounding United Microelectronics Corp (ADR) (NYSE:UMC).

What does the smart money think about United Microelectronics Corp (ADR) (NYSE:UMC)?

Heading into Q3, a total of 13 of the hedge funds we track were long in this stock, a change of 0% from one quarter earlier. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were boosting their holdings meaningfully.

When using filings from the hedgies we track, Daniel S. Och’s OZ Management had the biggest position in United Microelectronics Corp (ADR) (NYSE:UMC), worth close to $17.9 million, comprising 0.1% of its total 13F portfolio. Coming in second is Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $14.2 million position; 0.1% of its 13F portfolio is allocated to the stock. Other hedge funds that are bullish include Andrew Weiss’s Weiss Asset Management, William Michaelcheck’s Mariner Investment Group and Michael Hintze’s CQS Cayman LP.

As United Microelectronics Corp (ADR) (NYSE:UMC) has witnessed declining interest from the entirety of the hedge funds we track, it’s safe to say that there were a few fund managers who were dropping their positions entirely at the end of the second quarter. It’s worth mentioning that Howard Marks’s Oaktree Capital Management cut the largest investment of the “upper crust” of funds we monitor, totaling about $5 million in stock, and Israel Englander of Millennium Management was right behind this move, as the fund sold off about $0.8 million worth. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

How are insiders trading United Microelectronics Corp (ADR) (NYSE:UMC)?

Insider buying made by high-level executives is particularly usable when the company in question has experienced transactions within the past half-year. Over the last six-month time period, United Microelectronics Corp (ADR) (NYSE:UMC) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also take a look at the relationship between both of these indicators in other stocks similar to United Microelectronics Corp (ADR) (NYSE:UMC). These stocks are Lam Research Corporation (NASDAQ:LRCX), Cree, Inc. (NASDAQ:CREE), Advanced Semiconductor Engineering (ADR) (NYSE:ASX), Siliconware Precision Industries (ADR) (NASDAQ:SPIL), and Synopsys, Inc. (NASDAQ:SNPS). This group of stocks are the members of the semiconductor equipment & materials industry and their market caps are similar to UMC’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Lam Research Corporation (NASDAQ:LRCX) 40 0 0
Cree, Inc. (NASDAQ:CREE) 20 0 0
Advanced Semiconductor Engineering (ADR) (NYSE:ASX) 9 0 0
Siliconware Precision Industries (ADR) (NASDAQ:SPIL) 7 0 0
Synopsys, Inc. (NASDAQ:SNPS) 23 0 0

Using the returns shown by the previously mentioned research, regular investors should always keep one eye on hedge fund and insider trading sentiment, and United Microelectronics Corp (ADR) (NYSE:UMC) is no exception.

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