Integrated Device Technology, Inc. (IDTI): Are Hedge Funds Right About This Stock?

It seems that the masses and most of the financial media hate hedge funds and what they do, but why is this hatred of hedge funds so prominent? At the end of the day, these asset management firms do not gamble the hard-earned money of the people who are on the edge of poverty. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. The S&P 500 Index gained 5.2% in the 12 month-period that ended October 30, while less than 49% of its stocks beat the benchmark. In contrast, the 30 most popular S&P 500 stocks among the hedge fund investors tracked by the Insider Monkey team returned 9.5% over the same period, which provides evidence that these money managers do have great stock picking abilities. Even more to that, 63% of these stocks managed to beat the S&P 500 Index. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Integrated Device Technology, Inc. (NASDAQ:IDTI).

Is Integrated Device Technology, Inc. (NASDAQ:IDTI) a splendid investment today? The best stock pickers are taking a bearish view. The number of long hedge fund positions retreated by 7 recently. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as SolarWinds Inc (NYSE:SWI), Synaptics, Incorporated (NASDAQ:SYNA), and EnLink Midstream LLC (NYSE:ENLC) to gather more data points.

With all of this in mind, we’re going to take a look at the recent action regarding Integrated Device Technology, Inc. (NASDAQ:IDTI).

Hedge fund activity in Integrated Device Technology, Inc. (NASDAQ:IDTI)

Heading into Q4, a total of 36 of the hedge funds tracked by Insider Monkey were long this stock, a change of -16% from the second quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Ken Griffin’s Citadel Investment Group has the largest position in Integrated Device Technology, Inc. (NASDAQ:IDTI), worth close to $83.6 million, corresponding to 0.1% of its total 13F portfolio. On Citadel Investment Group’s heels is Columbus Circle Investors holding a $70.9 million position; 0.6% of its 13F portfolio is allocated to the stock. Other professional money managers with similar optimism contain Cliff Asness’ AQR Capital Management, Jim Simons’ Renaissance Technologies and Joel Greenblatt’s Gotham Asset Management.

Because Integrated Device Technology, Inc. (NASDAQ:IDTI) has witnessed declining sentiment from the smart money, we can see that there exists a select few hedgies that decided to sell off their positions entirely in the third quarter. Intriguingly, Daniel Benton’s Andor Capital Management said goodbye to the largest investment of the “upper crust” of funds monitored by Insider Monkey, valued at an estimated $16.3 million in call options, and Dmitry Balyasny’s Balyasny Asset Management was right behind this move, as the fund dumped about $14.1 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 7 funds in the third quarter.

Let’s also examine hedge fund activity in other stocks similar to Integrated Device Technology, Inc. (NASDAQ:IDTI). We will take a look at SolarWinds Inc (NYSE:SWI), Synaptics, Incorporated (NASDAQ:SYNA), EnLink Midstream LLC (NYSE:ENLC), and ITT Corp (NYSE:ITT). This group of stocks’ market values are similar to IDTI’s market value.

As you can see these stocks had an average of 19.5 hedge funds with bullish positions and the average amount invested in these stocks was $214 million. That figure was $520 million in IDTI’s case. ITT Corp (NYSE:ITT) is the most popular stock in this table. On the other hand EnLink Midstream LLC (NYSE:ENLC) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Integrated Device Technology, Inc. (NASDAQ:IDTI) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.