This Metric Says You Are Smart to Sell GSI Technology, Inc. (GSIT)

Is GSI Technology, Inc. (NASDAQ:GSIT) the right pick for your portfolio? Money managers are holding steady. The number of bullish hedge fund bets stayed the same which is a slightly negative development in our experience.

To most shareholders, hedge funds are perceived as underperforming, old financial vehicles of years past. While there are over 8000 funds trading today, we choose to focus on the top tier of this group, close to 450 funds. It is estimated that this group has its hands on the lion’s share of all hedge funds’ total asset base, and by tracking their highest performing picks, we have brought to light a number of investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy outperformed 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 outclassed the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).

Just as key, bullish insider trading activity is a second way to parse down the stock market universe. Just as you’d expect, there are a variety of motivations for an insider to downsize shares of his or her company, but just one, very simple reason why they would behave bullishly. Various academic studies have demonstrated the market-beating potential of this tactic if investors understand what to do (learn more here).

With these “truths” under our belt, we’re going to take a gander at the key action regarding GSI Technology, Inc. (NASDAQ:GSIT).

What have hedge funds been doing with GSI Technology, Inc. (NASDAQ:GSIT)?

At year’s end, a total of 7 of the hedge funds we track were long in this stock, a change of 0% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their stakes substantially.

According to our comprehensive database, Royce & Associates, managed by Chuck Royce, holds the most valuable position in GSI Technology, Inc. (NASDAQ:GSIT). Royce & Associates has a $16.2 million position in the stock, comprising 0.1% of its 13F portfolio. On Royce & Associates’s heels is Israel Englander of Millennium Management, with a $6.5 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining hedge funds that are bullish include Jim Simons’s Renaissance Technologies, Kelly Cardwell’s Central Square Management and Gregory Fraser, Rudolph Kluiber, and Timothy Kroch’s GRT Capital Partners.

What do corporate executives and insiders think about GSI Technology, Inc. (NASDAQ:GSIT)?

Insider buying is particularly usable when the primary stock in question has experienced transactions within the past 180 days. Over the last 180-day time frame, GSI Technology, Inc. (NASDAQ:GSIT) has seen zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to GSI Technology, Inc. (NASDAQ:GSIT). These stocks are FormFactor, Inc. (NASDAQ:FORM), Kopin Corporation (NASDAQ:KOPN), API Technologies Corp (NASDAQ:ATNY), LDK Solar Co., Ltd (ADR) (NYSE:LDK), and NeoPhotonics Corp (NYSE:NPTN). This group of stocks are the members of the semiconductor – broad line industry and their market caps are closest to GSIT’s market cap.

With the results exhibited by our time-tested strategies, retail investors should always keep an eye on hedge fund and insider trading sentiment, and GSI Technology, Inc. (NASDAQ:GSIT) applies perfectly to this mantra.

Click here to learn why you should track hedge funds