Is Applied Micro Circuits Corporation (NASDAQ:AMCC) a buy, sell, or hold? Hedge funds are becoming hopeful. The number of long hedge fund bets increased by 4 lately.
According to most shareholders, hedge funds are perceived as unimportant, outdated investment vehicles of years past. While there are more than 8000 funds trading today, we hone in on the moguls of this club, around 450 funds. It is estimated that this group has its hands on the lion’s share of the hedge fund industry’s total capital, and by monitoring their best picks, we have determined a few investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum 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 the details here).
Just as key, positive insider trading activity is a second way to break down the marketplace. There are a number of reasons for an upper level exec to sell shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Various empirical studies have demonstrated the impressive potential of this strategy if “monkeys” know what to do (learn more here).
Keeping this in mind, it’s important to take a look at the key action encompassing Applied Micro Circuits Corporation (NASDAQ:AMCC).
What does the smart money think about Applied Micro Circuits Corporation (NASDAQ:AMCC)?
At Q1’s end, a total of 14 of the hedge funds we track held long positions in this stock, a change of 40% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their holdings considerably.
When looking at the hedgies we track, Kingdom Ridge Capital, managed by Christopher Zepf and Brian Thonn, holds the most valuable position in Applied Micro Circuits Corporation (NASDAQ:AMCC). Kingdom Ridge Capital has a $53.8 million position in the stock, comprising 19.4% of its 13F portfolio. The second largest stake is held by Ken Griffin of Citadel Investment Group, with a $27.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Scott Fine and Peter Richards’s Empire Capital Management, Israel Englander’s Millennium Management and Richard Driehaus’s Driehaus Capital.
With a general bullishness amongst the heavyweights, some big names were leading the bulls’ herd. Andor Capital Management, managed by Daniel Benton, initiated the biggest position in Applied Micro Circuits Corporation (NASDAQ:AMCC). Andor Capital Management had 1.9 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also initiated a $0.6 million position during the quarter. The following funds were also among the new AMCC investors: David Costen Haley’s HBK Investments, Mike Vranos’s Ellington, and Matthew Tewksbury’s Stevens Capital Management.
What do corporate executives and insiders think about Applied Micro Circuits Corporation (NASDAQ:AMCC)?
Insider trading activity, especially when it’s bullish, is most useful when the company we’re looking at has seen transactions within the past 180 days. Over the latest 180-day time period, Applied Micro Circuits Corporation (NASDAQ:AMCC) has experienced 1 unique insiders buying, and 3 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Applied Micro Circuits Corporation (NASDAQ:AMCC). These stocks are Aeroflex Holding Corp. (NYSE:ARX), Photronics, Inc. (NASDAQ:PLAB), Micrel, Incorporated (NASDAQ:MCRL), Amkor Technology, Inc. (NASDAQ:AMKR), and Exar Corporation (NASDAQ:EXAR). This group of stocks belong to the semiconductor – integrated circuits industry and their market caps match AMCC’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Aeroflex Holding Corp. (NYSE:ARX) | 10 | 2 | 0 |
| Photronics, Inc. (NASDAQ:PLAB) | 13 | 0 | 6 |
| Micrel, Incorporated (NASDAQ:MCRL) | 6 | 1 | 0 |
| Amkor Technology, Inc. (NASDAQ:AMKR) | 16 | 0 | 0 |
| Exar Corporation (NASDAQ:EXAR) | 11 | 0 | 5 |
With the returns demonstrated by our time-tested strategies, retail investors must always pay attention to hedge fund and insider trading sentiment, and Applied Micro Circuits Corporation (NASDAQ:AMCC) applies perfectly to this mantra.
