Skyworks Solutions Inc (SWKS): Are Hedge Funds Right About This Stock?

Skyworks Solutions Inc (NASDAQ:SWKS) was in 23 hedge funds’ portfolio at the end of March. SWKS has seen a decrease in support from the world’s most elite money managers recently. There were 24 hedge funds in our database with SWKS positions at the end of the previous quarter.

According to most shareholders, hedge funds are perceived as slow, old financial vehicles of years past. While there are over 8000 funds with their doors open at present, we choose to focus on the elite of this group, close to 450 funds. It is estimated that this group oversees most of all hedge funds’ total capital, and by paying attention to their top equity investments, we have revealed a number of investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum 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 outperformed the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).

Just as important, optimistic insider trading activity is another way to parse down the financial markets. There are lots of motivations for an upper level exec to drop shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Several academic studies have demonstrated the impressive potential of this tactic if shareholders understand where to look (learn more here).

Now, let’s take a glance at the latest action regarding Skyworks Solutions Inc (NASDAQ:SWKS).

Hedge fund activity in Skyworks Solutions Inc (NASDAQ:SWKS)

In preparation for this quarter, a total of 23 of the hedge funds we track held long positions in this stock, a change of -4% from the previous quarter. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their stakes significantly.

When looking at the hedgies we track, Lee Ainslie’s Maverick Capital had the largest position in Skyworks Solutions Inc (NASDAQ:SWKS), worth close to $197.2 million, comprising 2.6% of its total 13F portfolio. The second largest stake is held by Amy Minella of Cardinal Capital, with a $40.3 million position; the fund has 2.5% of its 13F portfolio invested in the stock. Other peers that hold long positions include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Glenn Russell Dubin’s Highbridge Capital Management and Mark Kingdon’s Kingdon Capital.

Due to the fact that Skyworks Solutions Inc (NASDAQ:SWKS) has faced declining sentiment from the aggregate hedge fund industry, we can see that there is a sect of money managers that decided to sell off their full holdings at the end of the first quarter. It’s worth mentioning that Alex Sacerdote’s Whale Rock Capital Management dumped the biggest investment of the “upper crust” of funds we track, valued at close to $4.9 million in stock.. Jim Simons’s fund, Renaissance Technologies, also dropped its stock, about $3.4 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 1 funds at the end of the first quarter.

What have insiders been doing with Skyworks Solutions Inc (NASDAQ:SWKS)?

Bullish insider trading is at its handiest when the company we’re looking at has experienced transactions within the past half-year. Over the last 180-day time period, Skyworks Solutions Inc (NASDAQ:SWKS) has seen zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Skyworks Solutions Inc (NASDAQ:SWKS). These stocks are Hittite Microwave Corp (NASDAQ:HITT), Microsemi Corporation (NASDAQ:MSCC), Semtech Corporation (NASDAQ:SMTC), Marvell Technology Group Ltd. (NASDAQ:MRVL), and IPG Photonics Corporation (NASDAQ:IPGP). This group of stocks belong to the semiconductor – integrated circuits industry and their market caps resemble SWKS’s market cap.

With the results shown by Insider Monkey’s studies, retail investors should always monitor hedge fund and insider trading sentiment, and Skyworks Solutions Inc (NASDAQ:SWKS) shareholders fit into this picture quite nicely.

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