Is PDF Solutions, Inc. (NASDAQ:PDFS) going to take off soon? Hedge funds are in a pessimistic mood. The number of long hedge fund bets retreated by 5 in recent months.
In today’s marketplace, there are many gauges market participants can use to track Mr. Market. Some of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best investment managers can trounce the market by a solid amount (see just how much).
Equally as beneficial, positive insider trading sentiment is another way to parse down the stock market universe. Obviously, there are plenty of stimuli for a corporate insider to downsize shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Various empirical studies have demonstrated the useful potential of this strategy if you understand where to look (learn more here).
With these “truths” under our belt, let’s take a look at the key action regarding PDF Solutions, Inc. (NASDAQ:PDFS).
How have hedgies been trading PDF Solutions, Inc. (NASDAQ:PDFS)?
At the end of the fourth quarter, a total of 8 of the hedge funds we track were bullish in this stock, a change of -38% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their holdings considerably.
According to our comprehensive database, Spencer M. Waxman’s Shannon River Fund Management had the biggest position in PDF Solutions, Inc. (NASDAQ:PDFS), worth close to $17.3 million, comprising 2.3% of its total 13F portfolio. Coming in second is McKinley Capital Management, managed by Robert B. Gillam, which held a $3.2 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include Jim Simons’s Renaissance Technologies, Richard Driehaus’s Driehaus Capital and Amy Minella’s Cardinal Capital.
Because PDF Solutions, Inc. (NASDAQ:PDFS) has faced a declination in interest from the smart money, it’s easy to see that there were a few fund managers who were dropping their entire stakes last quarter. Intriguingly, Louis Navellier’s Navellier & Associates said goodbye to the biggest stake of the “upper crust” of funds we key on, worth about $1.5 million in stock.. Israel Englander’s fund, Millennium Management, also cut its stock, about $0.4 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 5 funds last quarter.
What do corporate executives and insiders think about PDF Solutions, Inc. (NASDAQ:PDFS)?
Bullish insider trading is most useful when the company in focus has seen transactions within the past six months. Over the last half-year time period, PDF Solutions, Inc. (NASDAQ:PDFS) has seen zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to PDF Solutions, Inc. (NASDAQ:PDFS). These stocks are Mentor Graphics Corp (NASDAQ:MENT), ACI Worldwide Inc (NASDAQ:ACIW), Tyler Technologies, Inc. (NYSE:TYL), ScanSource, Inc. (NASDAQ:SCSC), and Systemax Inc. (NYSE:SYX). All of these stocks are in the technical & system software industry and their market caps are similar to PDFS’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Mentor Graphics Corp (NASDAQ:MENT) | 16 | 0 | 4 |
| ACI Worldwide Inc (NASDAQ:ACIW) | 11 | 0 | 2 |
| Tyler Technologies, Inc. (NYSE:TYL) | 9 | 1 | 8 |
| ScanSource, Inc. (NASDAQ:SCSC) | 9 | 0 | 4 |
| Systemax Inc. (NYSE:SYX) | 5 | 0 | 0 |
With the results demonstrated by our strategies, retail investors must always monitor hedge fund and insider trading activity, and PDF Solutions, Inc. (NASDAQ:PDFS) applies perfectly to this mantra.
