FormFactor, Inc. (NASDAQ:FORM) has experienced a decrease in enthusiasm from smart money recently.
According to most shareholders, hedge funds are assumed to be unimportant, outdated financial tools of years past. While there are greater than 8000 funds in operation at the moment, we hone in on the aristocrats of this group, around 450 funds. It is estimated that this group controls most of the hedge fund industry’s total capital, and by tracking their highest performing equity investments, we have brought to light a number of investment strategies that have historically outpaced the 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 started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
Just as beneficial, positive insider trading activity is a second way to parse down the financial markets. Obviously, there are lots of incentives for an upper level exec to get rid of shares of his or her company, but just one, very simple reason why they would behave bullishly. Several empirical studies have demonstrated the market-beating potential of this strategy if investors understand what to do (learn more here).
Consequently, we’re going to take a gander at the key action regarding FormFactor, Inc. (NASDAQ:FORM).
What have hedge funds been doing with FormFactor, Inc. (NASDAQ:FORM)?
In preparation for this quarter, a total of 18 of the hedge funds we track held long positions in this stock, a change of -5% from the previous quarter. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were upping their stakes considerably.
Of the funds we track, Invicta Capital Management, managed by Gregory A. Weaver, holds the biggest position in FormFactor, Inc. (NASDAQ:FORM). Invicta Capital Management has a $8 million position in the stock, comprising 3.6% of its 13F portfolio. Coming in second is Chuck Royce of Royce & Associates, with a $5.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedgies that hold long positions include Cliff Asness’s AQR Capital Management, Steven Cohen’s SAC Capital Advisors and Youlia Miteva’s Proxima Capital Management.
Since FormFactor, Inc. (NASDAQ:FORM) has witnessed falling interest from the aggregate hedge fund industry, logic holds that there was a specific group of money managers who were dropping their positions entirely at the end of the first quarter. It’s worth mentioning that Ian P. Murray’s Lanexa Global Management sold off the largest investment of the “upper crust” of funds we track, valued at an estimated $2.4 million in stock., and Matthew Hulsizer of PEAK6 Capital Management was right behind this move, as the fund cut about $0.4 million worth. These moves are important to note, as total hedge fund interest was cut by 1 funds at the end of the first quarter.
How have insiders been trading FormFactor, Inc. (NASDAQ:FORM)?
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 180 days. Over the last half-year time period, FormFactor, Inc. (NASDAQ:FORM) has seen zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to FormFactor, Inc. (NASDAQ:FORM). These stocks are Silicon Image, Inc. (NASDAQ:SIMG), Entropic Communications, Inc. (NASDAQ:ENTR), GSI Technology, Inc. (NASDAQ:GSIT), Inphi Corporation (NYSE:IPHI), and Kopin Corporation (NASDAQ:KOPN). All of these stocks are in the semiconductor – broad line industry and their market caps are closest to FORM’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Silicon Image, Inc. (NASDAQ:SIMG) | 15 | 1 | 2 |
| Entropic Communications, Inc. (NASDAQ:ENTR) | 11 | 6 | 0 |
| GSI Technology, Inc. (NASDAQ:GSIT) | 7 | 0 | 1 |
| Inphi Corporation (NYSE:IPHI) | 7 | 3 | 0 |
| Kopin Corporation (NASDAQ:KOPN) | 9 | 1 | 0 |
With the returns exhibited by the aforementioned research, everyday investors must always monitor hedge fund and insider trading sentiment, and FormFactor, Inc. (NASDAQ:FORM) is an important part of this process.
