Why Broadcom Corporation (BRCM) Is The Best Stock You Don’t Own Enough Of

Page 1 of 2

Broadcom Corporation (NASDAQ:BRCM) is one of the most well-loved stocks on Wall Street, in terms of the sheer number of analysts who track the thing. It’s almost unreasonable. But looking at hedge fund sentiment, perhaps it’d be silly not to be bullish. Let’s take a look.

Now, according to many of your peers, hedge funds are perceived as overrated, outdated financial tools of an era lost to time. Although there are more than 8,000 hedge funds trading currently, this site aim at the aristocrats of this group, about 525 funds. It is assumed that this group controls the majority of the hedge fund industry’s total assets, and by keeping an eye on their highest quality equity investments, we’ve formulated a number of investment strategies that have historically beaten the S&P 500. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a year 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 beaten the S&P 500 index by 33 percentage points in 11 months (find the details here).

Just as useful, optimistic insider trading sentiment is another way to analyze the stock market universe. As the old adage goes: there are lots of stimuli for a corporate insider to get rid of shares of his or her company, but just one, very clear reason why they would behave bullishly. Several academic studies have demonstrated the valuable potential of this tactic if you understand what to do (learn more here).

Thus, it’s important to discuss the newest info surrounding Broadcom Corporation (NASDAQ:BRCM).

How are hedge funds trading Broadcom Corporation (NASDAQ:BRCM)?

At Q2’s end, a total of 44 of the hedge funds we track were bullish in this stock, a change of 42% from one quarter earlier. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were increasing their holdings meaningfully.

Broadcom Corporation (NASDAQ:BRCM)Out of the hedge funds we follow, Coatue Management, managed by Philippe Laffont, holds the largest position in Broadcom Corporation (NASDAQ:BRCM). Coatue Management has a $415.4 million position in the stock, comprising 4.6% of its 13F portfolio. Coming in second is Ken Griffin of Citadel Investment Group, with a $218.4 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Rob Citrone’s Discovery Capital Management, Jim Simons’s Renaissance Technologies and David Tepper’s Appaloosa Management LP.

Consequently, particular hedge funds have been driving this bullishness. Coatue Management, managed by Philippe Laffont, established the biggest position in Broadcom Corporation (NASDAQ:BRCM). Coatue Management had 415.4 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $218.4 million position during the quarter. The other funds with new positions in the stock are Rob Citrone’s Discovery Capital Management, Jim Simons’s Renaissance Technologies, and David Tepper’s Appaloosa Management LP.

How have insiders been trading Broadcom Corporation (NASDAQ:BRCM)?

Bullish insider trading is at its handiest when the primary stock in question has seen transactions within the past six months. Over the last six-month time frame, Broadcom Corporation (NASDAQ:BRCM) has experienced zero unique insiders buying, and 10 insider sales (see the details of insider trades here).

We’ll also examine the relationship between both of these indicators in other stocks similar to Broadcom Corporation (NASDAQ:BRCM). These stocks are Skyworks Solutions Inc (NASDAQ:SWKS), Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM), Marvell Technology Group Ltd. (NASDAQ:MRVL), Xilinx, Inc. (NASDAQ:XLNX), and Analog Devices, Inc. (NASDAQ:ADI). This group of stocks belong to the semiconductor – integrated circuits industry and their market caps are similar to BRCM’s market cap.

Page 1 of 2