Fabrinet (FN): Hedge Funds Are Bullish and Insiders Are Bearish, What Should You Do?

Is Fabrinet (NYSE:FN) a first-rate investment now? Investors who are in the know are getting more bullish. The number of long hedge fund bets moved up by 5 recently.

In the 21st century investor’s toolkit, there are tons of methods market participants can use to watch Mr. Market. A couple of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top fund managers can outpace the market by a healthy amount (see just how much).

Just as important, bullish insider trading activity is another way to break down the financial markets. Obviously, there are plenty of reasons for an executive to sell shares of his or her company, but just one, very clear reason why they would buy. Several academic studies have demonstrated the valuable potential of this strategy if shareholders understand what to do (learn more here).

Now, it’s important to take a peek at the recent action regarding Fabrinet (NYSE:FN).

How have hedgies been trading Fabrinet (NYSE:FN)?

At the end of the first quarter, a total of 13 of the hedge funds we track were long in this stock, a change of 63% from the first quarter. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their holdings substantially.

According to our comprehensive database, Royce & Associates, managed by Chuck Royce, holds the most valuable position in Fabrinet (NYSE:FN). Royce & Associates has a $49.1 million position in the stock, comprising 0.2% of its 13F portfolio. The second largest stake is held by Citadel Investment Group, managed by Ken Griffin, which held a $3.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedgies that are bullish include Mark Broach’s Manatuck Hill Partners, Scott Fine and Peter Richards’s Empire Capital Management and Joseph A. Jolson’s Harvest Capital Strategies.

Now, key money managers have been driving this bullishness. Empire Capital Management, managed by Scott Fine and Peter Richards, created the biggest position in Fabrinet (NYSE:FN). Empire Capital Management had 2.1 million invested in the company at the end of the quarter. Cliff Asness’s AQR Capital Management also made a $1.2 million investment in the stock during the quarter. The following funds were also among the new FN investors: John Overdeck and David Siegel’s Two Sigma Advisors, Steven Cohen’s SAC Capital Advisors, and Joel Greenblatt’s Gotham Asset Management.

Insider trading activity in Fabrinet (NYSE:FN)

Bullish insider trading is at its handiest when the company in question has experienced transactions within the past half-year. Over the last 180-day time frame, Fabrinet (NYSE:FN) has seen zero unique insiders buying, and 6 insider sales (see the details of insider trades here).

With the results demonstrated by Insider Monkey’s tactics, retail investors must always watch hedge fund and insider trading sentiment, and Fabrinet (NYSE:FN) is an important part of this process.

Click here to learn why you should track hedge funds