Hedge Funds Are Crazy About Cree, Inc. (CREE)

Cree, Inc. (NASDAQ:CREE) was in 22 hedge funds’ portfolio at the end of the first quarter of 2013. CREE shareholders have witnessed an increase in hedge fund sentiment recently. There were 18 hedge funds in our database with CREE holdings at the end of the previous quarter.

To the average investor, there are a multitude of methods shareholders can use to watch the equity markets. A pair of the most useful are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best fund managers can trounce the S&P 500 by a very impressive margin (see just how much).

Equally as beneficial, positive insider trading sentiment is a second way to parse down the world of equities. Obviously, there are a number of motivations for a bullish insider to sell shares of his or her company, but just one, very simple reason why they would behave bullishly. Various academic studies have demonstrated the market-beating potential of this method if investors understand what to do (learn more here).

With these “truths” under our belt, we’re going to take a glance at the recent action regarding Cree, Inc. (NASDAQ:CREE).

What does the smart money think about Cree, Inc. (NASDAQ:CREE)?

In preparation for this quarter, a total of 22 of the hedge funds we track were long in this stock, a change of 22% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their holdings considerably.

When looking at the hedgies we track, Donald Chiboucis’s Columbus Circle Investors had the most valuable position in Cree, Inc. (NASDAQ:CREE), worth close to $140 million, accounting for 1.1% of its total 13F portfolio. The second largest stake is held by Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which held a $61.7 million position; 0.5% of its 13F portfolio is allocated to the stock. Remaining hedgies that are bullish include Paul Reeder and Edward Shapiro’s PAR Capital Management, Jim Simons’s Renaissance Technologies and Ken Griffin’s Citadel Investment Group.

As one would reasonably expect, key money managers were breaking ground themselves. Andor Capital Management, managed by Daniel Benton, assembled the largest position in Cree, Inc. (NASDAQ:CREE). Andor Capital Management had 10.9 million invested in the company at the end of the quarter. Brian Ashford-Russell and Tim Woolley’s Polar Capital also made a $7.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Matthew Hulsizer’s PEAK6 Capital Management, Wojciech Uzdelewicz’s Espalier Global Management, and Cliff Asness’s AQR Capital Management.

Insider trading activity in Cree, Inc. (NASDAQ:CREE)

Bullish insider trading is particularly usable when the company in focus has experienced transactions within the past 180 days. Over the last 180-day time period, Cree, Inc. (NASDAQ:CREE) has experienced 1 unique insiders buying, and 4 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Cree, Inc. (NASDAQ:CREE). These stocks are KLA-Tencor Corporation (NASDAQ:KLAC), United Microelectronics Corp (ADR) (NYSE:UMC), Synopsys, Inc. (NASDAQ:SNPS), Lam Research Corporation (NASDAQ:LRCX), and Advanced Semiconductor Engineering (ADR) (NYSE:ASX). This group of stocks are the members of the semiconductor equipment & materials industry and their market caps match CREE’s market cap.

With the results demonstrated by our time-tested strategies, everyday investors should always monitor hedge fund and insider trading activity, and Cree, Inc. (NASDAQ:CREE) is an important part of this process.

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