Is it smart to be bullish on Integrated Silicon Solution, Inc. (NASDAQ:ISSI)?
If you were to ask many of your peers, hedge funds are perceived as useless, old investment tools of a forgotten age. Although there are more than 8,000 hedge funds trading in present day, Insider Monkey looks at the moguls of this club, around 525 funds. It is assumed that this group oversees the majority of the hedge fund industry’s total capital, and by monitoring their highest performing picks, we’ve unsheathed a number of investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy beat 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 trumped the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Just as crucial, optimistic insider trading sentiment is another way to look at the marketplace. There are a number of reasons for an insider to downsize shares of his or her company, but just one, very simple reason why they would behave bullishly. Many empirical studies have demonstrated the market-beating potential of this strategy if “monkeys” know where to look (learn more here).
Furthermore, it’s important to analyze the latest info about Integrated Silicon Solution, Inc. (NASDAQ:ISSI).
What have hedge funds been doing with Integrated Silicon Solution, Inc. (NASDAQ:ISSI)?
Heading into Q3, a total of 7 of the hedge funds we track held long positions in this stock, a change of -13% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings meaningfully.
Out of the hedge funds we follow, Chuck Royce’s Royce & Associates had the largest position in Integrated Silicon Solution, Inc. (NASDAQ:ISSI), worth close to $30.6 million, comprising 0.1% of its total 13F portfolio. On Royce & Associates’s heels is Peter Algert and Kevin Coldiron of Algert Coldiron Investors, with a $1.6 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Other hedgies with similar optimism include Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk’s GRT Capital Partners, John Overdeck and David Siegel’s Two Sigma Advisors and D. E. Shaw’s D E Shaw.
Judging by the fact that Integrated Silicon Solution, Inc. (NASDAQ:ISSI) has faced dropping sentiment from the entirety of the hedge funds we track, logic holds that there is a sect of fund managers who sold off their full holdings in Q1. Intriguingly, Ken Griffin’s Citadel Investment Group dropped the largest stake of the “upper crust” of funds we watch, comprising about $0.1 million in call options., and Ken Griffin of Citadel Investment Group was right behind this move, as the fund dropped about $0 million worth. These moves are interesting, as total hedge fund interest fell by 1 funds in Q1.
How have insiders been trading Integrated Silicon Solution, Inc. (NASDAQ:ISSI)?
Insider buying is most useful when the company we’re looking at has seen transactions within the past 180 days. Over the latest six-month time frame, Integrated Silicon Solution, Inc. (NASDAQ:ISSI) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll go over the relationship between both of these indicators in other stocks similar to Integrated Silicon Solution, Inc. (NASDAQ:ISSI). These stocks are Micron Technology, Inc. (NASDAQ:MU), Netlist, Inc. (NASDAQ:NLST), SemiLEDs Corporation (NASDAQ:LEDS), Spansion Inc. (NYSE:CODE), and Rambus Inc. (NASDAQ:RMBS). All of these stocks are in the semiconductor- memory chips industry and their market caps are closest to ISSI’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Micron Technology, Inc. (NASDAQ:MU) | 69 | 0 | 0 |
| Netlist, Inc. (NASDAQ:NLST) | 0 | 0 | |
| SemiLEDs Corporation (NASDAQ:LEDS) | 3 | 0 | 0 |
| Spansion Inc. (NYSE:CODE) | 22 | 0 | 0 |
| Rambus Inc. (NASDAQ:RMBS) | 8 | 0 | 0 |
Using the returns shown by the previously mentioned strategies, regular investors should always keep one eye on hedge fund and insider trading activity, and Integrated Silicon Solution, Inc. (NASDAQ:ISSI) applies perfectly to this mantra.
