Was Quentec Asset Management Right to Bet on Micron Technology, Inc. (MU), Fabrinet (FN), & Others

Quentec Asset Management LLC is a New York-based investment firm run by Ken Hahn. Quentec’s portfolio was valued at $804.84 million at the end of the second quarter. The firm invests in technology, utilities and telecommunication. Quentec returned 18.01% in the third quarter from its 23 long positions in companies having a market capitalization of $1 billion or more, according to our calculations.

Our research shows that non-microcap stock picks of hedge funds are worthwhile to watch, as compared to their short side of holdings. In the third quarter, 659 hedge funds in our database that had at least 5 non-microcap stocks in their 13F portfolio posted an average return of 8.3%, versus the S&P 500 ETFs return of 3.3%. Hedge funds on average are underperforming the market, resulting in investor exodus and disapointment, but tacking long portfolios of large-cap stocks is worth the investment and attention.

Quentec Asset Management also managed to post impressive returns by going long in large-cap companies. So let’s take a closer look at some of the fund’s top picks.

Quentec Asset Management boosted its stake in Himax Technologies, Inc. (ADR) (NASDAQ:HIMX) by 52% in the second quarter, having reported 2.66 million shares valued at $22.01 million in its last 13F filing. The stock inched up by 5.5% during the third quarter. At the end of June, 24 funds tracked by Insider Monkey were bullish on this stock, down by 11% from the previous quarter. More specifically, Prince Street Capital Management, managed by David Halpert, held the number one position in Himax Technologies, Inc. (ADR) (NASDAQ:HIMX). Prince Street Capital Management had a $24.8 million position in the stock. Other peers that were bullish consisted of Bruce Garelick’s Garelick Capital Partners, Israel Englander’s Millennium Management, and Spencer M. Waxman’s Shannon River Fund Management.

Quentec Asset Management unloaded 27% of its position in Fabrinet (NYSE:FN) during the second quarter, having ended the period with 575,979 shares worth $21.38 million. The stock gained 20.1% during the third quarter. A total of 18 followed by our team held shares of Fabrinet, down by 5% over the quarter. When looking at the institutional investors followed by Insider Monkey, Whale Rock Capital Management, managed by Alex Sacerdote, held the biggest position in Fabrinet (NYSE:FN), which was worth $51 million. Sitting at the No. 2 spot was Royce & Associates, led by Chuck Royce, holding a $21.4 million position. Some other members of the smart money with similar optimism encompass Richard Driehaus’s Driehaus Capital and D. E. Shaw’s D E Shaw.