There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other successful funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze Applied Micro Circuits Corporation (NASDAQ:AMCC) .
Is Applied Micro Circuits Corporation (NASDAQ:AMCC) a buy right now? It looks like money managers are becoming more confident. The number of bullish hedge fund positions that are disclosed in regulatory 13F filings moved up by one during the third quarter. In this way, 15 funds from our database held shares of AMCC at the end of September. At the end of this article we will also compare AMCC to other stocks including Quanex Building Products Corporation (NYSE:NX), Galapagos NV (ADR) (NASDAQ:GLPG), and William Lyon Homes (NYSE:WLH) to get a better sense of its popularity.
Follow Applied Micro Circuits Corp (NASDAQ:AMCC)
Follow Applied Micro Circuits Corp (NASDAQ:AMCC)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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With all of this in mind, let’s review the latest action surrounding Applied Micro Circuits Corporation (NASDAQ:AMCC).
What have hedge funds been doing with Applied Micro Circuits Corporation (NASDAQ:AMCC)?
Heading into the fourth quarter of 2016, a total of 15 funds tracked by Insider Monkey were bullish on this stock, which represents a change of 7% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in AMCC over the last five quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Christopher Zepf and Brian Thonn’s Kingdom Ridge Capital holds the largest position in Applied Micro Circuits Corporation (NASDAQ:AMCC). Kingdom Ridge Capital has a $55 million position in the stock, comprising 39.6% of its 13F portfolio. The second largest stake is held by Matthew Iorio’s White Elm Capital, with a $18.9 million position; 2.4% of its 13F portfolio is allocated to the stock. Other members of the smart money that are bullish include one of the largest hedge funds in the world, Renaissance Technologies, Ken Hahn’s Quentec Asset Management and John Hurley’s Cavalry Asset Management. We should note that Cavalry Asset Management is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
As one would reasonably expect, key hedge funds have jumped into Applied Micro Circuits Corporation (NASDAQ:AMCC) headfirst. Peter Muller’s PDT Partners assembled the largest position in Applied Micro Circuits Corporation (NASDAQ:AMCC). PDT Partners had $0.5 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also initiated a $0.3 million position during the quarter. The only other fund with a brand new AMCC position is Cliff Asness’ AQR Capital Management.
Let’s also examine hedge fund activity in other stocks similar to Applied Micro Circuits Corporation (NASDAQ:AMCC). We will take a look at Quanex Building Products Corporation (NYSE:NX), Galapagos NV (ADR) (NASDAQ:GLPG), William Lyon Homes (NYSE:WLH), and Clean Energy Fuels Corp (NASDAQ:CLNE). This group of stocks’ market caps are similar to AMCC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NX | 13 | 45742 | -3 |
| GLPG | 16 | 168438 | 2 |
| WLH | 17 | 298596 | 1 |
| CLNE | 11 | 31851 | -1 |
As you can see these stocks had an average of 14 investors with bullish positions and the average amount invested in these stocks was $136 million. That figure was $95 million in AMCC’s case. William Lyon Homes (NYSE:WLH) is the most popular stock in this table with 17 funds holding shares. On the other hand Clean Energy Fuels Corp (NASDAQ:CLNE) is the least popular one with only 11 bullish hedge fund positions. Applied Micro Circuits Corporation (NASDAQ:AMCC) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard William Lyon Homes (NYSE:WLH) might be a better candidate to consider taking a long position in.
Disclosure: None
