The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge funds have been producing disappointing net returns in recent years, however that was partly due to the poor performance of small-cap stocks in general. Well, small-cap stocks finally turned the corner and have been beating the large-cap stocks by more than 10 percentage points over the last 5 months.This means the relevancy of hedge funds’ public filings became inarguable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Cypress Semiconductor Corporation (NASDAQ:CY).
Cypress Semiconductor Corporation (NASDAQ:CY) shareholders have witnessed an increase in hedge fund sentiment of late. There were 31 hedge funds in our database with CY positions at the end of September, compared to 25 funds at the end of the second quarter. However, 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 Transocean LTD (NYSE:RIG), Take-Two Interactive Software, Inc. (NASDAQ:TTWO), and Huntsman Corporation (NYSE:HUN) to gather more data points.
Follow Cypress Semiconductor Corp (NASDAQ:CY)
Follow Cypress Semiconductor Corp (NASDAQ:CY)
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
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With all of this in mind, we’re going to review the fresh action encompassing Cypress Semiconductor Corporation (NASDAQ:CY).
How have hedgies been trading Cypress Semiconductor Corporation (NASDAQ:CY)?
Heading into the fourth quarter of 2016, a total of 31 of the hedge funds tracked by Insider Monkey were long Cypress Semiconductor Corporation, which represents an increase of 24% from one quarter earlier. On the other hand, there were a total of 24 hedge funds with a bullish position in CY at the beginning of this year. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Matthew Sidman’s Three Bays Capital has the number one position in Cypress Semiconductor Corporation (NASDAQ:CY), worth close to $149.9 million, corresponding to 10% of its total 13F portfolio. The second largest stake is held by Three Bays Capital, led by Matthew Sidman, holding a $85.1 million call position; 5.7% of its 13F portfolio is allocated to the stock. Other professional money managers that are bullish consist of Mario Gabelli’s GAMCO Investors, and Israel Englander’s Millennium Management. We should note that Three Bays Capital is included in our list of the 100 best performing hedge funds which is based on the performance of its 13F long positions in non-microcap stocks.
As aggregate interest increased, key hedge funds have been driving this bullishness. Quentec Asset Management, led by Ken Hahn, initiated the most outsized position in Cypress Semiconductor Corporation (NASDAQ:CY). Quentec Asset Management had $5.6 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also made a $5.2 million investment in the stock during the quarter. The other funds with brand new CY positions are Philippe Jabre’s Jabre Capital Partners, Warren Lammert’s Granite Point Capital, and John Fichthorn’s Dialectic Capital Management.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Cypress Semiconductor Corporation (NASDAQ:CY) but similarly valued. These stocks are Transocean LTD (NYSE:RIG), Take-Two Interactive Software, Inc. (NASDAQ:TTWO), Huntsman Corporation (NYSE:HUN), and TC Pipelines, LP (NYSE:TCP). This group of stocks’ market caps are similar to CY’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RIG | 35 | 457059 | 3 |
| TTWO | 46 | 1228866 | -1 |
| HUN | 42 | 563476 | 4 |
| TCP | 6 | 17667 | 0 |
As you can see these stocks had an average of 32 funds with bullish positions and the average amount invested in these stocks was $567 million. That figure was $367 million in CY’s case. Take-Two Interactive Software, Inc. (NASDAQ:TTWO) is the most popular stock in this table, while TC Pipelines, LP (NYSE:TCP) is the least popular one with only 6 bullish hedge fund positions. Cypress Semiconductor Corporation (NASDAQ:CY) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard TTWO might be a better candidate to consider taking a long position in.
Disclosure: none
