EMCORE Corporation (EMKR): Hedge Funds Are Bullish and Insiders Are Bearish, What Should You Do?

Is EMCORE Corporation (NASDAQ:EMKR) the right pick for your portfolio? Investors who are in the know are in a bullish mood. The number of bullish hedge fund bets improved by 5 lately.

To the average investor, there are dozens of metrics shareholders can use to monitor publicly traded companies. Some of the most innovative are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top investment managers can outclass the market by a healthy amount (see just how much).

Just as integral, bullish insider trading activity is another way to parse down the stock market universe. As the old adage goes: there are plenty of motivations for a corporate insider to sell shares of his or her company, but only one, very obvious reason why they would behave bullishly. Several academic studies have demonstrated the useful potential of this tactic if you know what to do (learn more here).

With these “truths” under our belt, we’re going to take a peek at the recent action regarding EMCORE Corporation (NASDAQ:EMKR).

What have hedge funds been doing with EMCORE Corporation (NASDAQ:EMKR)?

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’ capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings considerably.

When looking at the hedgies we track, Ken Grossman and Glen Schneider’s SG Capital Management had the most valuable position in EMCORE Corporation (NASDAQ:EMKR), worth close to $1.9 million, accounting for 0.9% of its total 13F portfolio. On SG Capital Management’s heels is Dialectic Capital Management, managed by John Fichthorn, which held a $1.5 million position; 0.2% of its 13F portfolio is allocated to the stock. Some other hedgies with similar optimism include Charles Davidson’s Wexford Capital, D. E. Shaw’s D E Shaw and John Overdeck and David Siegel’s Two Sigma Advisors.

Consequently, key money managers have been driving this bullishness. SG Capital Management, managed by Ken Grossman and Glen Schneider, assembled the largest position in EMCORE Corporation (NASDAQ:EMKR). SG Capital Management had 1.9 million invested in the company at the end of the quarter. Charles Davidson’s Wexford Capital also made a $0.8 million investment in the stock during the quarter. The other funds with new positions in the stock are John Overdeck and David Siegel’s Two Sigma Advisors, Thomas E. Claugus’s GMT Capital, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners.

What do corporate executives and insiders think about EMCORE Corporation (NASDAQ:EMKR)?

Insider trading activity, especially when it’s bullish, is best served when the primary stock in question has seen transactions within the past six months. Over the latest 180-day time period, EMCORE Corporation (NASDAQ:EMKR) has experienced zero unique insiders purchasing, and 7 insider sales (see the details of insider trades here).

With the returns shown by our tactics, retail investors must always monitor hedge fund and insider trading activity, and EMCORE Corporation (NASDAQ:EMKR) applies perfectly to this mantra.

Click here to learn why you should track hedge funds