Is RF Micro Devices, Inc. (NASDAQ:RFMD) going to take off soon? The smart money is betting on the stock. The number of long hedge fund bets went up by 2 in recent months.
In the eyes of most stock holders, hedge funds are assumed to be underperforming, old financial tools of yesteryear. While there are over 8000 funds trading today, we hone in on the moguls of this club, about 450 funds. Most estimates calculate that this group oversees the majority of the smart money’s total asset base, and by keeping an eye on their highest performing picks, we have spotted a few investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually 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 outpaced the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Equally as key, optimistic insider trading sentiment is a second way to break down the financial markets. There are plenty of motivations for a corporate insider to downsize shares of his or her company, but only one, very simple reason why they would buy. Many empirical studies have demonstrated the impressive potential of this method if shareholders understand where to look (learn more here).
Keeping this in mind, let’s take a glance at the latest action surrounding RF Micro Devices, Inc. (NASDAQ:RFMD).
Hedge fund activity in RF Micro Devices, Inc. (NASDAQ:RFMD)
At the end of the fourth quarter, a total of 15 of the hedge funds we track held long positions in this stock, a change of 15% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their stakes meaningfully.
When looking at the hedgies we track, Citadel Investment Group, managed by Ken Griffin, holds the biggest position in RF Micro Devices, Inc. (NASDAQ:RFMD). Citadel Investment Group has a $17 million position in the stock, comprising 0% of its 13F portfolio. Coming in second is Israel Englander of Millennium Management, with a $10 million position; 0.1% of its 13F portfolio is allocated to the company. Some other hedge funds that hold long positions include Glenn Russell Dubin’s Highbridge Capital Management, Steven Cohen’s SAC Capital Advisors and SAC Subsidiary’s Sigma Capital Management.
As one would reasonably expect, key hedge funds have jumped into RF Micro Devices, Inc. (NASDAQ:RFMD) headfirst. Highbridge Capital Management, managed by Glenn Russell Dubin, established the most outsized position in RF Micro Devices, Inc. (NASDAQ:RFMD). Highbridge Capital Management had 4 million invested in the company at the end of the quarter. Steven Cohen’s SAC Capital Advisors also initiated a $4 million position during the quarter. The following funds were also among the new RFMD investors: SAC Subsidiary’s Sigma Capital Management, Louis Bacon’s Moore Global Investments, and John Fichthorn’s Dialectic Capital Management.
Insider trading activity in RF Micro Devices, Inc. (NASDAQ:RFMD)
Insider purchases made by high-level executives is at its handiest when the company in question has seen transactions within the past 180 days. Over the latest 180-day time period, RF Micro Devices, Inc. (NASDAQ:RFMD) has seen zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to RF Micro Devices, Inc. (NASDAQ:RFMD). These stocks are International Rectifier Corporation (NYSE:IRF), PMC-Sierra Inc (NASDAQ:PMCS), Power Integrations Inc (NASDAQ:POWI), Fairchild Semiconductor Intl Inc (NYSE:FCS), and Semiconductor Manufacturing Int’l (ADR) (NYSE:SMI). All of these stocks are in the semiconductor – integrated circuits industry and their market caps are closest to RFMD’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| International Rectifier Corporation (NYSE:IRF) | 6 | 2 | 2 |
| PMC-Sierra Inc (NASDAQ:PMCS) | 20 | 0 | 2 |
| Power Integrations Inc (NASDAQ:POWI) | 7 | 0 | 10 |
| Fairchild Semiconductor Intl Inc (NYSE:FCS) | 12 | 0 | 5 |
| Semiconductor Manufacturing Int’l (ADR) (NYSE:SMI) | 3 | 0 | 0 |
With the returns shown by our research, retail investors should always keep an eye on hedge fund and insider trading activity, and RF Micro Devices, Inc. (NASDAQ:RFMD) is no exception.
Click here to learn more about Insider Monkey’s Hedge Fund Newsletter
Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.
