With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was Sunedison Semiconductor Ltd (NASDAQ:SEMI).
Sunedison Semiconductor Ltd (NASDAQ:SEMI) was in 21 hedge funds’ portfolios at the end of the third quarter of 2015. SEMI investors should pay attention to a decrease in enthusiasm from smart money in recent months. There were 24 hedge funds in our database with SEMI holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Fred’s, Inc. (NASDAQ:FRED), Global Brass and Copper Holdings Inc (NYSE:BRSS), and San Juan Basin Royalty Trust (NYSE:SJT) to gather more data points.
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In the 21st century investor’s toolkit there are a lot of tools stock traders put to use to analyze stocks. Some of the best tools are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the best picks of the top money managers can outpace the broader indices by a significant margin (see the details here).
With all of this in mind, let’s view the recent action encompassing Sunedison Semiconductor Ltd (NASDAQ:SEMI).
How have hedgies been trading Sunedison Semiconductor Ltd (NASDAQ:SEMI)?
At the end of the third quarter, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -13% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Seth Klarman’s Baupost Group has the largest position in Sunedison Semiconductor Ltd (NASDAQ:SEMI), worth close to $88.3 million, corresponding to 1.5% of its total 13F portfolio. Coming in second is Greenlight Capital, led by David Einhorn, holding a $19.9 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Some other members of the smart money with similar optimism comprise Bernard Lambilliotte’s Ecofin Ltd, Christopher Lyle’s SCGE Management and Manish Chopra’s Tiger Veda.
Because Sunedison Semiconductor Ltd (NASDAQ:SEMI) has experienced bearish sentiment from the aggregate hedge fund industry, logic holds that there is a sect of funds that slashed their full holdings in the third quarter. Intriguingly, Dan Sobol and Lisa Hess’s SkyTop Capital Management cut the largest stake of the 700 funds watched by Insider Monkey, worth an estimated $4.8 million in stock. Paul Marshall and Ian Wace’s fund, Marshall Wace LLP, also dumped its stock, about $4.3 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 3 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Sunedison Semiconductor Ltd (NASDAQ:SEMI). These stocks are Fred’s, Inc. (NASDAQ:FRED), Global Brass and Copper Holdings Inc (NYSE:BRSS), San Juan Basin Royalty Trust (NYSE:SJT), and MainSource Financial Group Inc. (NASDAQ:MSFG). This group of stocks’ market valuations are closest to SEMI’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FRED | 5 | 1638 | -2 |
| BRSS | 21 | 36057 | 2 |
| SJT | 7 | 60838 | -2 |
| MSFG | 4 | 5917 | 1 |
As you can see these stocks had an average of 9.25 hedge funds with bullish positions and the average amount invested in these stocks was $26 million. That figure was $217 million in SEMI’s case. Global Brass and Copper Holdings Inc (NYSE:BRSS) is the most popular stock in this table. On the other hand MainSource Financial Group Inc. (NASDAQ:MSFG) is the least popular one with only 4 bullish hedge fund positions. Along with BRSS, Sunedison Semiconductor Ltd (NASDAQ:SEMI) is the most popular stock in this group and that makes the stock worth a closer look.
