Maxim Integrated Products Inc. (MXIM): Hedge Funds Are Bullish and Insiders Are Undecided, What Should You Do?

Is it smart to be bullish on Maxim Integrated Products Inc. (NASDAQ:MXIM)?


If you were to ask many market players, hedge funds are assumed to be bloated, outdated investment tools of an era lost to time. Although there are In excess of 8,000 hedge funds in operation in present day, Insider Monkey focuses on the masters of this group, around 525 funds. It is widely held that this group controls the majority of the hedge fund industry's total assets, and by tracking their highest quality equity investments, we've spotted a few investment strategies that have historically beaten the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a 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 beaten the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).


Just as key, positive insider trading activity is another way to analyze the investments you're interested in. Just as you'd expect, there are a number of motivations for a bullish insider to get rid of shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the valuable potential of this method if shareholders understand what to do (learn more here).


Now that that's out of the way, it's important to discuss the recent info about Maxim Integrated Products Inc. (NASDAQ:MXIM).


How are hedge funds trading Maxim Integrated Products Inc. (NASDAQ:MXIM)?


At Q2's end, a total of 22 of the hedge funds we track were bullish in this stock, a change of 57% from one quarter earlier. With hedge funds' positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their stakes substantially.


Maxim Integrated Products Inc. (NASDAQ:MXIM)When using filings from the hedgies we track, Renaissance Technologies, managed by Jim Simons, holds the most valuable position in Maxim Integrated Products Inc. (NASDAQ:MXIM). Renaissance Technologies has a $100.7 million position in the stock, comprising 0.3% of its 13F portfolio. The second largest stake is held by Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $86 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Some other hedgies that are bullish include Ken Griffin's Citadel Investment Group, Cliff Asness's AQR Capital Management and Robert Rodriguez and Steven Romick's First Pacific Advisors LLC.


Now, certain bigger names were leading the bulls' herd. Renaissance Technologies, managed by Jim Simons, assembled the most valuable position in Maxim Integrated Products Inc. (NASDAQ:MXIM). Renaissance Technologies had 100.7 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital also initiated a $86 million position during the quarter. The following funds were also among the new MXIM investors: Ken Griffin's Citadel Investment Group, Cliff Asness's AQR Capital Management, and Robert Rodriguez and Steven Romick's First Pacific Advisors LLC.


What have insiders been doing with Maxim Integrated Products Inc. (NASDAQ:MXIM)?


Bullish insider trading is most useful when the company in focus has experienced transactions within the past six months. Over the last 180-day time frame, Maxim Integrated Products Inc. (NASDAQ:MXIM) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).


We'll also take a look at the relationship between both of these indicators in other stocks similar to Maxim Integrated Products Inc. (NASDAQ:MXIM). These stocks are Freescale Semiconductor Ltd (NYSE:FSL), AU Optronics Corp. (ADR) (NYSE:AUO), STMicroelectronics N.V. (ADR) (NYSE:STM), NXP Semiconductors NV (NASDAQ:NXPI), and Avago Technologies Ltd (NASDAQ:AVGO). This group of stocks belong to the semiconductor - broad line industry and their market caps are closest to MXIM's market cap.
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Company Name
# of Hedge Funds
# of Insiders Buying
# of Insiders Selling

Freescale Semiconductor Ltd (NYSE:FSL)
20
0
0

AU Optronics Corp. (ADR) (NYSE:AUO)
8
0
0

STMicroelectronics N.V. (ADR) (NYSE:STM)
11
0
0

NXP Semiconductors NV (NASDAQ:NXPI)
30
0
0

Avago Technologies Ltd (NASDAQ:AVGO)
26
0
0

Using the results shown by our analyses, average investors must always keep one eye on hedge fund and insider trading sentiment, and Maxim Integrated Products Inc. (NASDAQ:MXIM) shareholders fit into this picture quite nicely.


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