Here is What Hedge Funds Think About Silicon Graphics International Corp (SGI)

Is it smart to be bullish on Silicon Graphics International Corp (NASDAQ:SGI)?

In the 21st century investor’s toolkit, there are many gauges shareholders can use to track publicly traded companies. Two of the most useful are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite fund managers can outclass their index-focused peers by a healthy margin (see just how much).

Just as key, optimistic insider trading activity is another way to look at the financial markets. Obviously, there are plenty of reasons for a bullish insider to sell shares of his or her company, but just one, very clear reason why they would buy. Various empirical studies have demonstrated the market-beating potential of this strategy if investors understand what to do (learn more here).

Thus, we’re going to study the recent info about Silicon Graphics International Corp (NASDAQ:SGI).

What have hedge funds been doing with Silicon Graphics International Corp (NASDAQ:SGI)?

At Q2’s end, a total of 17 of the hedge funds we track were bullish in this stock, a change of 13% from the first quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their stakes significantly.

Out of the hedge funds we follow, Phil Frohlich’s Prescott Group Capital Management had the biggest position in Silicon Graphics International Corp (NASDAQ:SGI), worth close to $15.8 million, comprising 3.7% of its total 13F portfolio. On Prescott Group Capital Management’s heels is Matthew Hulsizer of PEAK6 Capital Management, with a $5.6 million call position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Ken Griffin’s Citadel Investment Group, Israel Englander’s Millennium Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

As one would understandably expect, certain money managers have been driving this bullishness. Prescott Group Capital Management, managed by Phil Frohlich, created the most valuable position in Silicon Graphics International Corp (NASDAQ:SGI). Prescott Group Capital Management had 15.8 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also initiated a $5.6 million position during the quarter. The other funds with brand new SGI positions are Ken Griffin’s Citadel Investment Group, Israel Englander’s Millennium Management, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

How have insiders been trading Silicon Graphics International Corp (NASDAQ:SGI)?

Legal insider trading, particularly when it’s bullish, is most useful when the company in question has seen transactions within the past 180 days. Over the last half-year time period, Silicon Graphics International Corp (NASDAQ:SGI) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also take a look at the relationship between both of these indicators in other stocks similar to Silicon Graphics International Corp (NASDAQ:SGI). These stocks are International Business Machines Corp. (NYSE:IBM), Hewlett-Packard Company (NYSE:HPQ), Teradata Corporation (NYSE:TDC), and Cray Inc. (NASDAQ:CRAY). This group of stocks are the members of the diversified computer systems industry and their market caps are closest to SGI’s market cap.

Using the results demonstrated by our studies, average investors must always track hedge fund and insider trading activity, and Silicon Graphics International Corp (NASDAQ:SGI) is no exception.

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