Peregrine Semiconductor Corp (PSMI): Are Hedge Funds Right About This Stock?

Peregrine Semiconductor Corp (NASDAQ:PSMI) was in 6 hedge funds’ portfolio at the end of the fourth quarter of 2012. PSMI has experienced a decrease in hedge fund sentiment of late. There were 9 hedge funds in our database with PSMI positions at the end of the previous quarter.

To the average investor, there are tons of metrics investors can use to analyze Mr. Market. A duo of the most useful are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best investment managers can beat the S&P 500 by a significant margin (see just how much).

Equally as integral, optimistic insider trading sentiment is a second way to parse down the stock market universe. As the old adage goes: there are lots of stimuli for a corporate insider to downsize shares of his or her company, but just one, very clear reason why they would initiate a purchase. Various academic studies have demonstrated the useful potential of this strategy if “monkeys” know what to do (learn more here).

Consequently, we’re going to take a gander at the recent action encompassing Peregrine Semiconductor Corp (NASDAQ:PSMI).

How are hedge funds trading Peregrine Semiconductor Corp (NASDAQ:PSMI)?

At year’s end, a total of 6 of the hedge funds we track were long in this stock, a change of -33% from the previous quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings meaningfully.

According to our comprehensive database, QVT Financial, managed by Daniel Gold, holds the biggest position in Peregrine Semiconductor Corp (NASDAQ:PSMI). QVT Financial has a $6.2 million position in the stock, comprising 0.4% of its 13F portfolio. The second largest stake is held by Scott Burney of Bluefin Investment Management, with a $4.2 million position; 1.7% of its 13F portfolio is allocated to the stock. Remaining peers that are bullish include Brian Ashford-Russell and Tim Woolley’s Polar Capital, Richard Driehaus’s Driehaus Capital and Israel Englander’s Millennium Management.

Due to the fact that Peregrine Semiconductor Corp (NASDAQ:PSMI) has faced bearish sentiment from hedge fund managers, we can see that there lies a certain “tier” of funds who were dropping their entire stakes last quarter. Interestingly, Seymour Sy Kaufman and Michael Stark’s Crosslink Capital cut the biggest position of the 450+ funds we watch, valued at about $4.5 million in stock., and Philip Hempleman of Ardsley Partners was right behind this move, as the fund dropped about $3.9 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 3 funds last quarter.

Insider trading activity in Peregrine Semiconductor Corp (NASDAQ:PSMI)

Insider trading activity, especially when it’s bullish, is most useful when the primary stock in question has seen transactions within the past six months. Over the last 180-day time period, Peregrine Semiconductor Corp (NASDAQ:PSMI) has seen 4 unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Peregrine Semiconductor Corp (NASDAQ:PSMI). These stocks are Volterra Semiconductor Corporation (NASDAQ:VLTR), Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE), Audience Inc (NASDAQ:ADNC), ParkerVision, Inc. (NASDAQ:PRKR), and Oplink Communications, Inc (NASDAQ:OPLK). This group of stocks are in the semiconductor – integrated circuits industry and their market caps resemble PSMI’s market cap.

With the results shown by Insider Monkey’s research, retail investors must always monitor hedge fund and insider trading activity, and Peregrine Semiconductor Corp (NASDAQ:PSMI) shareholders fit into this picture quite nicely.

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