Cadian Capital Management is an equity long/short hedge fund based in New York with a focus on the technology sector and its current principal manager is Eric Bannasch. Bannasch is a former portfolio manager at Perry Capital for the Technology, Media and Telecommunications (TMT) sectors and founded Cadian Capital in October of 2007. The New York-based event-driven hedge fund delivered an annualized return of 11.95% with 17.75% standard deviation in the period of October 2007 to January 2012, which allowed Cadian Capital to become one of the best-performing equity long/short funds. The latest 13F filing reveals that Eric Bannasch’s fund manages a public equity portfolio worth $3.71 billion as of March 31. Given Bannasch’s expertise across the TMT sectors, in the following article we will analyze Cadian Capital’s major positions in the technology industry, which includes several semiconductor stocks. Those top picks of Bannasch are Micron Technology Inc. (NASDAQ:MU), Altera Corp. (NASDAQ:ALTR), PMC-Sierra Inc. (NASDAQ:PMCS) and Qlik Technologies Inc. (NASDAQ:QLIK).
We follow hedge funds like Cadian Capital because our research has shown that their stock picks historically managed to generate alpha even though the filings are up to 45-days delayed. We used a 60-day delay in our back tests to be on the safe side and our research showed that the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Total Return Index by an average of 95 basis points per month between 1999 and 2012. After adjusting for risk, our calculations revealed that these stocks’ monthly alpha was 80 basis points. We have also been sharing and tracking the performance of these stocks since the end of August 2012, during which time they have returned 144%, outperforming the S&P 500 ETF by nearly 85 percentage points (see more details here).
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Cadian Capital increased its equity holding in Micron Technology Inc. (NASDAQ:MU) by 8.68 million shares, ending the most recent quarter with a stake of 13.90 million shares valued at $377.21 million. The stock has been trading close to its 52-week low during the last few weeks, which might represent a great buying opportunity for bottom-fishing investors. Moreover, the stock has jumped on an uptrend during the previous week as the company has seen some upgrades to the “Buy” side by some research teams, including the Japanese banking firm, Mizuho. Additionally, Micron’s management is confident in the company’s new CFO, Ernie Maddock, who embarks on his new journey as CFO beginning today. David Einhorn’s Greenlight Capital is bullish on Micron Technology Inc. (NASDAQ:MU), owning 33.55 million shares at the end of the first quarter.
Cadian Capital reported selling 521,700 shares of Altera Corp. (NASDAQ:ALTR), decreasing its total holding to 7.82 million shares. Nevertheless, the value of the entire stake increased during the first quarter to $335.49 million despite this relatively sizable sell-off. The stock has skyrocketed by over 40% year-to-date to $51.80 per share, which possibly led to some profit-taking by Cadian. Intel (NASDAQ:INTC) announced the purchase of Altera for approximately $16.7 billion in cash this morning, with the deal’s $54 per share payout being almost 56% higher than Altera’s shares were before the on-again, off-again acquisition talks were first reported on March 27. Boykin Curry’s Eagle Capital Management is the largest shareholder of Altera Corp. (NASDAQ:ALTR) of the hedge funds we monitor, owning approximately 10.54 million shares.
Cadian increased its overall position in PMC-Sierra Inc. (NASDAQ:PMCS) to 28.62 million shares by purchasing 1.69 million shares during the first quarter. The equity stake owned by Cadian Capital is worth $265.64 million as of March 31. Despite the fact that the stock has decreased by nearly 1% since the beginning of the current year, Sierra’s shares are currently riding a strong upward trend by increasing almost 5% during the previous trading week. Additionally, the company has been delivering strong financial results lately, including adjusted earnings of $0.08 per share for the first quarter that outpaced analysts’ estimates of $0.07. PMC-Sierra also delivered revenue of $133.1 million, which was 5.2% higher year-over-year. Ralph V. Whitworth’s Relational Investors is the second-largest shareholder in PMC-Sierra Inc. (NASDAQ:PMCS) right behind Cadian Capital, holding an equity stake of 22.81 million shares.
Cadian Capital also sold roughly 10% of its stake in Qlik Technologies Inc. (NASDAQ:QLIK) during the first quarter, with the hedge fund’s position amounting to 8.27 million shares valued at $257.52 million. Although investors are prone to put a great deal of emphasis on financial results, there are more factors to consider when analyzing Qlik Technologies. While the company reported better-than-expected financials in the most recent quarter, which of course pleased its shareholders, Qlik Technologies, a leader in visual analytics, has also been judged by Business Application Research Center (BARC) as an innovator in the BARC Business Intelligence Score 2015 report. Subsequently, Qlik is the lone visual analytics provider included in the above-mentioned category, which indicates that the company is perceived as an extremely fast-growing company that might yield attractive gains in the upcoming months and years. Kerr Neilson’s Platinum Asset Management is one of the largest investors in Qlik Technologies Inc. (NASDAQ:QLIK) from the funds in our database, owning nearly 5.22 million shares.
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