NVIDIA Corporation (NASDAQ:NVDA) has seen a decrease in hedge fund interest recently.
If you’d ask most market participants, hedge funds are assumed to be slow, outdated financial tools of yesteryear. While there are over 8000 funds with their doors open at the moment, we look at the top tier of this club, about 450 funds. Most estimates calculate that this group has its hands on the lion’s share of all hedge funds’ total capital, and by keeping an eye on their top investments, we have revealed a few investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year 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 outclassed the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).
Equally as important, positive insider trading sentiment is another way to parse down the world of equities. Just as you’d expect, there are plenty of incentives for a bullish insider to downsize shares of his or her company, but just one, very clear reason why they would buy. Several academic studies have demonstrated the useful potential of this strategy if you understand what to do (learn more here).
Consequently, it’s important to take a look at the key action surrounding NVIDIA Corporation (NASDAQ:NVDA).
What have hedge funds been doing with NVIDIA Corporation (NASDAQ:NVDA)?
At the end of the fourth quarter, a total of 27 of the hedge funds we track were long in this stock, a change of -13% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their stakes significantly.
When looking at the hedgies we track, Steven Cohen’s SAC Capital Advisors had the largest position in NVIDIA Corporation (NASDAQ:NVDA), worth close to $33 million, accounting for 0.2% of its total 13F portfolio. The second largest stake is held by AQR Capital Management, managed by Cliff Asness, which held a $25 million position; 0.5% of its 13F portfolio is allocated to the stock. Other peers with similar optimism include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Martin Whitman’s Third Avenue Management.
Because NVIDIA Corporation (NASDAQ:NVDA) has faced bearish sentiment from hedge fund managers, logic holds that there lies a certain “tier” of hedgies that elected to cut their full holdings last quarter. Interestingly, Panayotis æTakisÆ Sparaggis’s Alkeon Capital Management dumped the biggest position of the 450+ funds we key on, comprising about $28 million in stock., and Patrik Brummer of Zenit Asset Management AB was right behind this move, as the fund dumped about $5 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 4 funds last quarter.
What do corporate executives and insiders think about NVIDIA Corporation (NASDAQ:NVDA)?
Insider trading activity, especially when it’s bullish, is most useful when the primary stock in question has seen transactions within the past six months. Over the last six-month time period, NVIDIA Corporation (NASDAQ:NVDA) has experienced zero unique insiders buying, and 1 insider sales (see the details of insider trades here).
With the returns demonstrated by Insider Monkey’s strategies, everyday investors must always watch hedge fund and insider trading activity, and NVIDIA Corporation (NASDAQ:NVDA) applies perfectly to this mantra.
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