Silicon Image, Inc. (SIMG): Are Hedge Funds Right About This Stock?

What’s a smart Silicon Image, Inc. (NASDAQ:SIMG) investor to do?

In the 21st century investor’s toolkit, there are a multitude of gauges market participants can use to monitor their holdings. Some of the most underrated are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best fund managers can trounce the broader indices by a solid amount (see just how much).

Just as key, bullish insider trading activity is a second way to look at the stock market universe. Just as you’d expect, there are lots of motivations for a corporate insider to drop shares of his or her company, but just one, very clear reason why they would initiate a purchase. Plenty of academic studies have demonstrated the useful potential of this method if investors know where to look (learn more here).

What’s more, it’s important to examine the recent info for Silicon Image, Inc. (NASDAQ:SIMG).

Hedge fund activity in Silicon Image, Inc. (NASDAQ:SIMG)

In preparation for the third quarter, a total of 15 of the hedge funds we track held long positions in this stock, a change of 0% 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 boosting their holdings meaningfully.

According to our 13F database, Jim Simons’s Renaissance Technologies had the biggest position in Silicon Image, Inc. (NASDAQ:SIMG), worth close to $9.5 million, comprising less than 0.1%% of its total 13F portfolio. The second largest stake is held by Carlson Capital, managed by Clint Carlson, which held a $8.3 million position; 0.1% of its 13F portfolio is allocated to the company. Other peers with similar optimism include Peter A. Wright’s P.A.W. CAPITAL PARTNERS, D. E. Shaw’s D E Shaw and Cliff Asness’s AQR Capital Management.

Due to the fact Silicon Image, Inc. (NASDAQ:SIMG) has witnessed declining interest from the smart money’s best and brightest, it’s easy to see that there were a few hedge funds who were dropping their full holdings last quarter. At the top of the heap, Matthew Drapkin and Steven R. Becker’s Becker Drapkin Management dumped the largest position of all the hedgies we monitor, totaling about $7.6 million in stock, and Mark N. Diker of Diker Management was right behind this move, as the fund said goodbye to about $0.9 million worth. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

How are insiders trading Silicon Image, Inc. (NASDAQ:SIMG)?

Legal insider trading, particularly when it’s bullish, is best served when the company in focus has experienced transactions within the past half-year. Over the latest 180-day time period, Silicon Image, Inc. (NASDAQ:SIMG) has experienced 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 Silicon Image, Inc. (NASDAQ:SIMG). These stocks are M/A-COM Technology Solutions Holdings (NASDAQ:MTSI), Kopin Corporation (NASDAQ:KOPN), FormFactor, Inc. (NASDAQ:FORM), Inphi Corporation (NYSE:IPHI), and Entropic Communications, Inc. (NASDAQ:ENTR). This group of stocks are in the semiconductor – broad line industry and their market caps resemble SIMG’s market cap.

Using the returns explained by Insider Monkey’s analyses, average investors should always watch hedge fund and insider trading sentiment, and Silicon Image, Inc. (NASDAQ:SIMG) applies perfectly to this mantra.

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