AU Optronics Corp. (ADR) (AUO): Hedge Funds and Insiders Are Bearish, What Should You Do?

AU Optronics Corp. (ADR) (NYSE:AUO) investors should be aware of a decrease in activity from the world’s largest hedge funds recently.

To the average investor, there are a multitude of gauges market participants can use to watch stocks. Two of the best are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top hedge fund managers can outpace their index-focused peers by a very impressive amount (see just how much).

Equally as beneficial, bullish insider trading sentiment is a second way to break down the world of equities. As the old adage goes: there are a variety of reasons for an executive to cut shares of his or her company, but only one, very obvious reason why they would buy. Various academic studies have demonstrated the market-beating potential of this tactic if shareholders understand what to do (learn more here).

Keeping this in mind, let’s take a look at the latest action regarding AU Optronics Corp. (ADR) (NYSE:AUO).

Hedge fund activity in AU Optronics Corp. (ADR) (NYSE:AUO)

At Q1’s end, a total of 6 of the hedge funds we track were long in this stock, a change of -25% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were upping their holdings meaningfully.

When looking at the hedgies we track, Renaissance Technologies, managed by Jim Simons, holds the most valuable position in AU Optronics Corp. (ADR) (NYSE:AUO). Renaissance Technologies has a $2.8 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Renaissance Technologies’s heels is Sigma Capital Management, managed by SAC Subsidiary, which held a $0.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedge funds that are bullish include Israel Englander’s Millennium Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Matthew Tewksbury’s Stevens Capital Management.

Judging by the fact that AU Optronics Corp. (ADR) (NYSE:AUO) has witnessed a declination in interest from the aggregate hedge fund industry, it’s easy to see that there was a specific group of money managers that elected to cut their entire stakes at the end of the first quarter. At the top of the heap, Bruce Kovner’s Caxton Associates LP sold off the biggest position of the “upper crust” of funds we watch, worth an estimated $0.2 million in stock.. D. E. Shaw’s fund, D E Shaw, also said goodbye to its stock, about $0.1 million worth. These moves are interesting, as total hedge fund interest fell by 2 funds at the end of the first quarter.

What have insiders been doing with AU Optronics Corp. (ADR) (NYSE:AUO)?

Insider trading activity, especially when it’s bullish, is at its handiest when the company we’re looking at has experienced transactions within the past half-year. Over the latest 180-day time period, AU Optronics Corp. (ADR) (NYSE:AUO) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to AU Optronics Corp. (ADR) (NYSE:AUO). These stocks are STMicroelectronics N.V. (ADR) (NYSE:STM), Mellanox Technologies, Ltd. (NASDAQ:MLNX), Atmel Corporation (NASDAQ:ATML), ON Semiconductor Corp (NASDAQ:ONNN), and Freescale Semiconductor Ltd (NYSE:FSL). This group of stocks are the members of the semiconductor – broad line industry and their market caps match AUO’s market cap.

With the results exhibited by the aforementioned studies, retail investors must always watch hedge fund and insider trading sentiment, and AU Optronics Corp. (ADR) (NYSE:AUO) shareholders fit into this picture quite nicely.

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