Texas Instruments Incorporated (TXN): Hedge Funds and Insiders Are Bearish, What Should You Do?

Texas Instruments Incorporated (NASDAQ:TXN) investors should be aware of a decrease in activity from the world’s largest hedge funds of late.

At the moment, there are tons of metrics investors can use to monitor the equity markets. Two of the most innovative are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite fund managers can trounce the market by a solid margin (see just how much).

Equally as key, bullish insider trading sentiment is another way to parse down the investments you’re interested in. There are lots of motivations for an insider to drop shares of his or her company, but just one, very simple reason why they would buy. Plenty of academic studies have demonstrated the market-beating potential of this strategy if “monkeys” know what to do (learn more here).

With all of this in mind, let’s take a look at the latest action encompassing Texas Instruments Incorporated (NASDAQ:TXN).

Hedge fund activity in Texas Instruments Incorporated (NASDAQ:TXN)

In preparation for this quarter, a total of 23 of the hedge funds we track were long in this stock, a change of -8% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their stakes considerably.

When looking at the hedgies we track, First Eagle Investment Management, managed by Jean-Marie Eveillard, holds the biggest position in Texas Instruments Incorporated (NASDAQ:TXN). First Eagle Investment Management has a $206.1 million position in the stock, comprising 0.7% of its 13F portfolio. Sitting at the No. 2 spot is International Value Advisers, managed by Charles de Vaulx, which held a $124.5 million position; 2.9% of its 13F portfolio is allocated to the stock. Some other hedgies that hold long positions include Wallace Weitz’s Wallace R. Weitz & Co., Bill Miller’s Legg Mason Capital Management and Daniel S. Och’s OZ Management.

Since Texas Instruments Incorporated (NASDAQ:TXN) has witnessed declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there exists a select few funds who sold off their positions entirely last quarter. It’s worth mentioning that Philippe Jabre’s Jabre Capital Partners dumped the biggest position of all the hedgies we watch, comprising an estimated $17 million in call options, and Israel Englander of Millennium Management was right behind this move, as the fund sold off about $10 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 2 funds last quarter.

How have insiders been trading Texas Instruments Incorporated (NASDAQ:TXN)?

Insider trading activity, especially when it’s bullish, is at its handiest when the company in focus has experienced transactions within the past half-year. Over the latest half-year time frame, Texas Instruments Incorporated (NASDAQ:TXN) has experienced zero unique insiders purchasing, and 15 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Texas Instruments Incorporated (NASDAQ:TXN). 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 Intel Corporation (NASDAQ:INTC). This group of stocks are the members of the semiconductor – broad line industry and their market caps resemble TXN’s market cap.