Inphi Corporation (NYSE:IPHI) has experienced an increase in activity from the world’s largest hedge funds in recent months.
According to most stock holders, hedge funds are assumed to be worthless, outdated financial tools of years past. While there are greater than 8000 funds trading at present, we look at the top tier of this group, close to 450 funds. Most estimates calculate that this group oversees the lion’s share of all hedge funds’ total capital, and by paying attention to their top investments, we have brought to light a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 24 percentage points in 7 months (see the details here).
Equally as beneficial, positive insider trading sentiment is another way to parse down the world of equities. There are lots of stimuli for an upper level exec to cut shares of his or her company, but only one, very simple reason why they would buy. Plenty of empirical studies have demonstrated the valuable potential of this strategy if piggybackers know what to do (learn more here).
With all of this in mind, it’s important to take a peek at the latest action encompassing Inphi Corporation (NYSE:IPHI).
What does the smart money think about Inphi Corporation (NYSE:IPHI)?
Heading into 2013, a total of 9 of the hedge funds we track were long in this stock, a change of 29% from one quarter earlier. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were increasing their holdings meaningfully.
When looking at the hedgies we track, Ken Griffin’s Citadel Investment Group had the biggest position in Inphi Corporation (NYSE:IPHI), worth close to $15.3 million, comprising less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Gregory A. Weaver of Invicta Capital Management, with a $10.5 million position; the fund has 4.7% of its 13F portfolio invested in the stock. Remaining hedgies that hold long positions include Brian Ashford-Russell and Tim Woolley’s Polar Capital, Ian P. Murray’s Lanexa Global Management and Israel Englander’s Millennium Management.
As industrywide interest jumped, key hedge funds have been driving this bullishness. Millennium Management, managed by Israel Englander, initiated the most valuable position in Inphi Corporation (NYSE:IPHI). Millennium Management had 1.6 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also initiated a $0.9 million position during the quarter. The other funds with brand new IPHI positions are D. E. Shaw’s D E Shaw and Cliff Asness’s AQR Capital Management.
How are insiders trading Inphi Corporation (NYSE:IPHI)?
Insider purchases made by high-level executives is most useful when the primary stock in question has seen transactions within the past six months. Over the last six-month time period, Inphi Corporation (NYSE:IPHI) has seen 3 unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Inphi Corporation (NYSE:IPHI). These stocks are GSI Technology, Inc. (NASDAQ:GSIT), Silicon Image, Inc. (NASDAQ:SIMG), Kopin Corporation (NASDAQ:KOPN), FormFactor, Inc. (NASDAQ:FORM), and Entropic Communications, Inc. (NASDAQ:ENTR). This group of stocks are in the semiconductor – broad line industry and their market caps match IPHI’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| GSI Technology, Inc. (NASDAQ:GSIT) | 7 | 0 | 1 |
| Silicon Image, Inc. (NASDAQ:SIMG) | 13 | 3 | 1 |
| Kopin Corporation (NASDAQ:KOPN) | 4 | 0 | 0 |
| FormFactor, Inc. (NASDAQ:FORM) | 15 | 0 | 3 |
| Entropic Communications, Inc. (NASDAQ:ENTR) | 9 | 6 | 0 |
With the results shown by the aforementioned studies, retail investors must always pay attention to hedge fund and insider trading sentiment, and Inphi Corporation (NYSE:IPHI) is an important part of this process.
