According to most market participants, hedge funds are perceived as unimportant, outdated financial tools of years past. While there are more than 8000 funds in operation at the moment, we at Insider Monkey choose to focus on the aristocrats of this club, about 450 funds. It is widely believed that this group has its hands on most of all hedge funds’ total asset base, and by monitoring their top investments, we have come up with a few investment strategies that have historically outperformed Mr. Market. 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 outperformed the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Just as integral, optimistic insider trading activity is a second way to parse down the world of equities. Obviously, there are a variety of incentives for a bullish insider to cut shares of his or her company, but only one, very simple reason why they would buy. Various empirical studies have demonstrated the market-beating potential of this method if you understand where to look (learn more here).
Consequently, it’s important to take a look at the key action encompassing Cabot Microelectronics Corporation (NASDAQ:CCMP).
How have hedgies been trading Cabot Microelectronics Corporation (NASDAQ:CCMP)?
At Q1’s end, a total of 11 of the hedge funds we track held long positions in this stock, a change of 83% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were upping their stakes significantly.
According to our comprehensive database, Chuck Royce’s Royce & Associates had the most valuable position in Cabot Microelectronics Corporation (NASDAQ:CCMP), worth close to $107.4 million, comprising 0.3% of its total 13F portfolio. Coming in second is Jim Simons of Renaissance Technologies, with a $5.4 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other hedge funds that hold long positions include Israel Englander’s Millennium Management, Ken Griffin’s Citadel Investment Group and John Overdeck and David Siegel’s Two Sigma Advisors.
With a general bullishness amongst the heavyweights, some big names have jumped into Cabot Microelectronics Corporation (NASDAQ:CCMP) headfirst. Millennium Management, managed by Israel Englander, created the largest position in Cabot Microelectronics Corporation (NASDAQ:CCMP). Millennium Management had 2.1 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $1 million investment in the stock during the quarter. The other funds with new positions in the stock are D. E. Shaw’s D E Shaw, Steven Cohen’s SAC Capital Advisors, and Matthew Tewksbury’s Stevens Capital Management.
What do corporate executives and insiders think about Cabot Microelectronics Corporation (NASDAQ:CCMP)?
Insider purchases made by high-level executives is most useful when the company in focus has seen transactions within the past half-year. Over the last six-month time period, Cabot Microelectronics Corporation (NASDAQ:CCMP) has seen zero unique insiders buying, and 13 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Cabot Microelectronics Corporation (NASDAQ:CCMP). These stocks are Diodes Incorporated (NASDAQ:DIOD), EZchip Semiconductor Ltd. (NASDAQ:EZCH), InvenSense Inc (NYSE:INVN), OmniVision Technologies, Inc. (NASDAQ:OVTI), and TriQuint Semiconductor (NASDAQ:TQNT). This group of stocks are the members of the semiconductor – integrated circuits industry and their market caps are similar to CCMP’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Diodes Incorporated (NASDAQ:DIOD) | 11 | 0 | 1 |
| EZchip Semiconductor Ltd. (NASDAQ:EZCH) | 5 | 0 | 0 |
| InvenSense Inc (NYSE:INVN) | 18 | 0 | 6 |
| OmniVision Technologies, Inc. (NASDAQ:OVTI) | 18 | 0 | 2 |
| TriQuint Semiconductor (NASDAQ:TQNT) | 8 | 2 | 0 |
With the returns shown by our strategies, retail investors must always monitor hedge fund and insider trading sentiment, and Cabot Microelectronics Corporation (NASDAQ:CCMP) applies perfectly to this mantra.
