Is Oclaro, Inc. (OCLR) Going to Burn These Hedge Funds?

Is Oclaro, Inc. (NASDAQ:OCLR) undervalued? Money managers are turning less bullish. The number of bullish hedge fund positions were trimmed by 2 lately.

At the moment, there are a multitude of methods shareholders can use to analyze their holdings. A couple of the most under-the-radar are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top investment managers can trounce their index-focused peers by a superb amount (see just how much).

Equally as key, bullish insider trading sentiment is a second way to parse down the stock market universe. There are plenty of incentives for a bullish insider to sell shares of his or her company, but just one, very simple reason why they would initiate a purchase. Many academic studies have demonstrated the valuable potential of this tactic if “monkeys” understand where to look (learn more here).

Consequently, we’re going to take a glance at the recent action regarding Oclaro, Inc. (NASDAQ:OCLR).

Hedge fund activity in Oclaro, Inc. (NASDAQ:OCLR)

In preparation for this year, a total of 6 of the hedge funds we track held long positions in this stock, a change of -25% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their holdings significantly.

Of the funds we track, Chuck Royce’s Royce & Associates had the largest position in Oclaro, Inc. (NASDAQ:OCLR), worth close to $3.2 million, accounting for less than 0.1%% of its total 13F portfolio. Coming in second is Mark Broach of Manatuck Hill Partners, with a $1.6 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other peers that are bullish include Jim Simons’s Renaissance Technologies, Cliff Asness’s AQR Capital Management and Israel Englander’s Millennium Management.

Because Oclaro, Inc. (NASDAQ:OCLR) has faced falling interest from the entirety of the hedge funds we track, it’s easy to see that there is a sect of hedge funds who were dropping their entire stakes last quarter. At the top of the heap, John Kleinheinz’s Kleinheinz Capital Partners sold off the largest stake of the 450+ funds we key on, worth close to $9.1 million in stock., and Thomas E. Claugus of GMT Capital was right behind this move, as the fund sold off about $0.4 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 2 funds last quarter.

What do corporate executives and insiders think about Oclaro, Inc. (NASDAQ:OCLR)?

Insider purchases made by high-level executives is most useful when the primary stock in question has seen transactions within the past 180 days. Over the latest half-year time frame, Oclaro, Inc. (NASDAQ:OCLR) has seen zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Oclaro, Inc. (NASDAQ:OCLR). These stocks are Mattson Technology, Inc. (NASDAQ:MTSN), eMagin Corporation (NYSEAMEX:EMAN), Mindspeed Technologies, Inc. (NASDAQ:MSPD), Axcelis Technologies Inc (NASDAQ:ACLS), and Cascade Microtech, Inc. (NASDAQ:CSCD). This group of stocks are the members of the semiconductor equipment & materials industry and their market caps match OCLR’s market cap.