Atmel Corporation (ATML): Are Hedge Funds Right About This Stock?

Atmel Corporation (NASDAQ:ATML) shareholders have witnessed a decrease in activity from the world’s largest hedge funds lately.

According to most investors, hedge funds are seen as slow, old financial tools of the past. While there are more than 8000 funds in operation at present, we choose to focus on the top tier of this club, about 450 funds. It is estimated that this group has its hands on most of the hedge fund industry’s total capital, and by watching their top stock picks, we have brought to light a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per 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 outclassed the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Equally as key, optimistic insider trading activity is another way to parse down the stock market universe. As the old adage goes: there are a variety of incentives for an insider to drop shares of his or her company, but only one, very obvious reason why they would behave bullishly. Plenty of empirical studies have demonstrated the impressive potential of this tactic if piggybackers know what to do (learn more here).

With all of this in mind, it’s important to take a glance at the key action encompassing Atmel Corporation (NASDAQ:ATML).

How are hedge funds trading Atmel Corporation (NASDAQ:ATML)?

In preparation for this quarter, a total of 18 of the hedge funds we track were bullish in this stock, a change of -10% from one quarter earlier. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes considerably.

When looking at the hedgies we track, Leon Cooperman’s Omega Advisors had the most valuable position in Atmel Corporation (NASDAQ:ATML), worth close to $49.9 million, comprising 0.8% of its total 13F portfolio. Sitting at the No. 2 spot is Citadel Investment Group, managed by Ken Griffin, which held a $47.5 million position; 0.1% of its 13F portfolio is allocated to the company. Other peers that are bullish include John Osterweis’s Osterweis Capital Management, Richard Chilton’s Chilton Investment Company and Panayotis Takis Sparaggis’s Alkeon Capital Management.

Due to the fact that Atmel Corporation (NASDAQ:ATML) has faced bearish sentiment from the smart money, we can see that there were a few funds who were dropping their full holdings at the end of the first quarter. It’s worth mentioning that Jim Simons’s Renaissance Technologies said goodbye to the largest investment of all the hedgies we monitor, comprising an estimated $5.5 million in stock.. Christopher Lord’s fund, Criterion Capital, also dumped its stock, about $4.5 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 2 funds at the end of the first quarter.

How have insiders been trading Atmel Corporation (NASDAQ:ATML)?

Insider purchases made by high-level executives is best served when the company we’re looking at has seen transactions within the past half-year. Over the latest six-month time period, Atmel Corporation (NASDAQ:ATML) has experienced zero unique insiders buying, and 3 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Atmel Corporation (NASDAQ:ATML). These stocks are Cavium Inc (NASDAQ:CAVM), Mellanox Technologies, Ltd. (NASDAQ:MLNX), AU Optronics Corp. (ADR) (NYSE:AUO), Freescale Semiconductor Ltd (NYSE:FSL), and ON Semiconductor Corp (NASDAQ:ONNN). This group of stocks belong to the semiconductor – broad line industry and their market caps are closest to ATML’s market cap.

With the returns shown by the aforementioned tactics, retail investors must always watch hedge fund and insider trading activity, and Atmel Corporation (NASDAQ:ATML) is no exception.

Click here to learn why you should track hedge funds