Is Atmel Corporation (ATML) Going to Burn These Hedge Funds?

If you were to ask many of your fellow readers, hedge funds are viewed as delayed, old investment tools of a period lost to current times. Although there are over 8,000 hedge funds with their doors open currently, Insider Monkey looks at the elite of this club, about 525 funds. It is assumed that this group has its hands on most of the smart money’s total capital, and by watching their best stock picks, we’ve uncovered a few investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum 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 33 percentage points in 11 months (find the details here).

Equally as key, bullish insider trading sentiment is another way to analyze the stock market universe. There are a variety of reasons for an upper level exec to sell shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Plenty of academic studies have demonstrated the valuable potential of this tactic if you know what to do (learn more here).

Keeping this in mind, let’s study the recent info surrounding Atmel Corporation (NASDAQ:ATML).

How have hedgies been trading Atmel Corporation (NASDAQ:ATML)?

In preparation for the third quarter, a total of 25 of the hedge funds we track held long positions in this stock, a change of 39% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their stakes substantially.

When using filings from the hedgies we track, Leon Cooperman’s Omega Advisors had the most valuable position in Atmel Corporation (NASDAQ:ATML), worth close to $61.5 million, accounting for 0.9% of its total 13F portfolio. On Omega Advisors’s heels is John Osterweis of Osterweis Capital Management, with a $44.1 million position; the fund has 1.6% of its 13F portfolio invested in the stock. Other hedge funds that are bullish include John A. Levin’s Levin Capital Strategies, Richard Chilton’s Chilton Investment Company and Philippe Laffont’s Coatue Management.

As one would understandably expect, specific money managers have jumped into Atmel Corporation (NASDAQ:ATML) headfirst. Omega Advisors, managed by Leon Cooperman, created the most outsized position in Atmel Corporation (NASDAQ:ATML). Omega Advisors had 61.5 million invested in the company at the end of the quarter. John Osterweis’s Osterweis Capital Management also made a $44.1 million investment in the stock during the quarter. The following funds were also among the new ATML investors: John A. Levin’s Levin Capital Strategies, Richard Chilton’s Chilton Investment Company, and Philippe Laffont’s Coatue Management.

How are insiders trading Atmel Corporation (NASDAQ:ATML)?

Insider buying made by high-level executives is particularly usable when the primary stock in question has seen transactions within the past six months. Over the latest 180-day time frame, Atmel Corporation (NASDAQ:ATML) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also examine the relationship between both of these indicators in other stocks similar to Atmel Corporation (NASDAQ:ATML). These stocks are Cavium Inc (NASDAQ:CAVM), Mellanox Technologies, Ltd. (NASDAQ:MLNX), AU Optronics Corp. (ADR) (NYSE:AUO), Freescale Semiconductor Ltd (NYSE:FSL), and ON Semiconductor Corp (NASDAQ:ONNN). All of these stocks are in the semiconductor – broad line industry and their market caps are closest to ATML’s market cap.

Using the returns shown by the previously mentioned research, regular investors must always keep one eye on hedge fund and insider trading sentiment, and Atmel Corporation (NASDAQ:ATML) shareholders fit into this picture quite nicely.

Discover how hedge fund piggybacking can benefit you