Is Integrated Silicon Solution, Inc. (NASDAQ:ISSI) undervalued? The best stock pickers are getting less optimistic. The number of long hedge fund bets decreased by 3 recently.
According to most investors, hedge funds are seen as worthless, outdated investment vehicles of years past. While there are over 8000 funds trading at present, we hone in on the bigwigs of this club, around 450 funds. It is estimated that this group oversees most of the smart money’s total asset base, and by keeping an eye on their top investments, we have deciphered a few investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have trumped 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 sentiment is a second way to parse down the stock market universe. Just as you’d expect, there are plenty of motivations for a bullish insider to get rid of shares of his or her company, but just one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the impressive potential of this method if “monkeys” understand what to do (learn more here).
Now, let’s take a look at the key action regarding Integrated Silicon Solution, Inc. (NASDAQ:ISSI).
What does the smart money think about Integrated Silicon Solution, Inc. (NASDAQ:ISSI)?
In preparation for this quarter, a total of 8 of the hedge funds we track were long in this stock, a change of -27% from one quarter earlier. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings considerably.
Of the funds we track, Chuck Royce’s Royce & Associates had the biggest position in Integrated Silicon Solution, Inc. (NASDAQ:ISSI), worth close to $27.3 million, comprising 0.1% of its total 13F portfolio. Coming in second is Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk of GRT Capital Partners, with a $1.3 million position; 0.3% of its 13F portfolio is allocated to the stock. Some other hedgies that are bullish include Peter Algert and Kevin Coldiron’s Algert Coldiron Investors, John Overdeck and David Siegel’s Two Sigma Advisors and D. E. Shaw’s D E Shaw.
Seeing as Integrated Silicon Solution, Inc. (NASDAQ:ISSI) has experienced declining sentiment from the entirety of the hedge funds we track, we can see that there exists a select few hedge funds who sold off their positions entirely heading into Q2. Interestingly, Mark N. Diker’s Diker Management cut the largest investment of all the hedgies we track, comprising an estimated $2.6 million in stock.. Joel Greenblatt’s fund, Gotham Asset Management, also dropped its stock, about $0.3 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 3 funds heading into Q2.
What have insiders been doing with Integrated Silicon Solution, Inc. (NASDAQ:ISSI)?
Insider buying is most useful when the primary stock in question has experienced transactions within the past 180 days. Over the last six-month time frame, Integrated Silicon Solution, Inc. (NASDAQ:ISSI) has experienced zero unique insiders buying, and 3 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Integrated Silicon Solution, Inc. (NASDAQ:ISSI). These stocks are Micron Technology, Inc. (NASDAQ:MU), Netlist, Inc. (NASDAQ:NLST), SemiLEDs Corporation (NASDAQ:LEDS), Spansion Inc. (NYSE:CODE), and Rambus Inc. (NASDAQ:RMBS). All of these stocks are in the semiconductor- memory chips industry and their market caps are similar to ISSI’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Micron Technology, Inc. (NASDAQ:MU) | 37 | 0 | 12 |
| Netlist, Inc. (NASDAQ:NLST) | 2 | 1 | 0 |
| SemiLEDs Corporation (NASDAQ:LEDS) | 3 | 0 | 1 |
| Spansion Inc. (NYSE:CODE) | 23 | 0 | 4 |
| Rambus Inc. (NASDAQ:RMBS) | 8 | 0 | 0 |
With the results shown by the aforementioned tactics, retail investors should always keep an eye on hedge fund and insider trading sentiment, and Integrated Silicon Solution, Inc. (NASDAQ:ISSI) is an important part of this process.
