Is Intel Corporation (INTC) Going to Burn These Hedge Funds?

Is Intel Corporation (NASDAQ:INTC) a buy here? Investors who are in the know are in a bullish mood. The number of bullish hedge fund bets advanced by 4 lately.

If you’d ask most traders, hedge funds are viewed as unimportant, old financial vehicles of the past. While there are over 8000 funds with their doors open at the moment, we at Insider Monkey choose to focus on the crème de la crème of this group, about 450 funds. It is widely believed that this group oversees the majority of the hedge fund industry’s total capital, and by keeping an eye on their top picks, we have formulated a few investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year 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 trumped the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Just as integral, positive insider trading sentiment is another way to break down the financial markets. Obviously, there are plenty of stimuli for an executive to get rid of shares of his or her company, but just one, very clear reason why they would initiate a purchase. Many academic studies have demonstrated the useful potential of this strategy if shareholders understand what to do (learn more here).

With all of this in mind, it’s important to take a gander at the latest action regarding Intel Corporation (NASDAQ:INTC).

What does the smart money think about Intel Corporation (NASDAQ:INTC)?

Heading into Q2, a total of 54 of the hedge funds we track were bullish in this stock, a change of 8% from the previous quarter. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings meaningfully.

According to our comprehensive database, First Eagle Investment Management, managed by Jean-Marie Eveillard, holds the most valuable position in Intel Corporation (NASDAQ:INTC). First Eagle Investment Management has a $729.7 million position in the stock, comprising 2.4% of its 13F portfolio. Sitting at the No. 2 spot is Paul Ruddock and Steve Heinz of Lansdowne Partners, with a $451.4 million call position; 6.2% of its 13F portfolio is allocated to the company. Other hedge funds that are bullish include Ken Fisher’s Fisher Asset Management, Jim Simons’s Renaissance Technologies and Phill Gross and Robert Atchinson’s Adage Capital Management.

With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. Lansdowne Partners, managed by Paul Ruddock and Steve Heinz, created the most outsized call position in Intel Corporation (NASDAQ:INTC). Lansdowne Partners had 451.4 million invested in the company at the end of the quarter. Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC also made a $117.5 million investment in the stock during the quarter. The other funds with brand new INTC positions are Peter Adam Hochfelder’s Brahman Capital, Philippe Jabre’s Jabre Capital Partners, and Tony Chedraoui’s Tyrus Capital.

How have insiders been trading Intel Corporation (NASDAQ:INTC)?

Insider buying is particularly usable when the company in question has experienced transactions within the past 180 days. Over the last 180-day time period, Intel Corporation (NASDAQ:INTC) has seen zero unique insiders buying, and 8 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Intel Corporation (NASDAQ:INTC). These stocks are STMicroelectronics N.V. (ADR) (NYSE:STM), NXP Semiconductors NV (NASDAQ:NXPI), Avago Technologies Ltd (NASDAQ:AVGO), Maxim Integrated Products Inc. (NASDAQ:MXIM), and Texas Instruments Incorporated (NASDAQ:TXN). This group of stocks are the members of the semiconductor – broad line industry and their market caps are similar to INTC’s market cap.