Hedge funds are not perfect. They have their bad picks just like everyone else. Micron, a stock hedge funds have loved, lost 50% during the last 12 months ending in October 30. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 30 S&P 500 stocks among hedge funds at the end of September 2014 yielded an average return of 9.5% in the same time period, vs. a gain of 5.2% for the S&P 500 Index. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of GigOptix Inc (NYSEMKT:GIG).
GigOptix Inc (NYSEMKT:GIG) was in 7 hedge funds’ portfolios at the end of the third quarter of 2015, this number increasing by two during the third quarter. These investors were right to be bullish, seeing that the stock has climbed by 53% since the end of September. In this article, we are going to take a closer look at the winners that have bet on GigOptix and will also compare GIG to other stocks, including Lombard Medical Inc (NASDAQ:EVAR), Xplore Technologies Corp. (NASDAQ:XPLR), and Aldeyra Therapeutics Inc (NASDAQ:ALDX) to get a better sense of its popularity.
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In today’s marketplace there are numerous methods that stock traders put to use to appraise publicly traded companies. Some of the most useful methods are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the top picks of the top investment managers can outperform the market by a healthy margin (see the details here).
Keeping this in mind, let’s take a look at the new action regarding GigOptix Inc (NYSEAMEX:GIG).
What does the smart money think about GigOptix Inc (NYSEMKT:GIG)?
Heading into Q4, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 40% from the second quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Diker Management, managed by Mark N. Diker, holds the largest position in GigOptix Inc (NYSEMKT:GIG). Diker Management has a $3.7 million position in the stock, comprising 0.8% of its 13F portfolio. The second most bullish fund manager is Rima Senvest Management, led by Richard Mashaal, holding a $2.1 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining professional money managers that hold long positions include Jim Simons’ Renaissance Technologies, Josh Goldberg’s G2 Investment Partners Management, and Mark Coe’s Coe Capital Management.
As one would reasonably expect, some big names have jumped into GigOptix Inc (NYSEMKT:GIG) headfirst. G2 Investment Partners Management initiated the largest position in GigOptix Inc (NYSEMKT:GIG) that was worth $0.9 million at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0.1 million position during the quarter. The only other fund with a brand new GIG position is Israel Englander’s Millennium Management.
Let’s now review hedge fund activity in other stocks similar to GigOptix Inc (NYSEAMEX:GIG). We will take a look at Lombard Medical Inc (NASDAQ:EVAR), Xplore Technologies Corp. (NASDAQ:XPLR), Aldeyra Therapeutics Inc (NASDAQ:ALDX), and Amtech Systems, Inc. (NASDAQ:ASYS). This group of stocks’ market valuations are closest to GIG’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EVAR | 4 | 4534 | 0 |
| XPLR | 4 | 2768 | 0 |
| ALDX | 7 | 13025 | 0 |
| ASYS | 4 | 9742 | 0 |
As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $8 million. That figure was $9 million in GIG’s case. Aldeyra Therapeutics Inc (NASDAQ:ALDX) is the most popular stock in this table. On the other hand Lombard Medical Inc (NASDAQ:EVAR) is the least popular one with only 4 bullish hedge fund positions. GigOptix Inc (NYSEMKT:GIG) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ALDX might be a better candidate to consider a long position.
