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Do you consider the buying trends of "smart money" investors when comparing stocks? We ran a screen with this idea in mind.

We ran a screen on the semiconductor sector for stocks with troubling trends in inventory: growth in quarterly revenue slower than growth in quarterly inventory year-over-year. We also screened for companies with quarterly inventory increasing as a percent of current assets.

When revenue is growing slower than inventory, it may indicate that the company is having trouble selling its inventory - although this might just indicate inventory building or a change in sales policies.

To identify some of the semiconductor stocks that investors should be wary of, we then screened for bearish sentiment from institutional investors, with significant net institutional sales over the last quarter representing at least 5% of share float. This indicates that institutional investors such as hedge fund managers and mutual fund managers expect these names to underperform in the future, despite their high growth projections.

We were left with 4 stocks in our list.

Do you think its time to exit these names? Use the list below as a starting point for your analysis.

1. Cirrus Logic Inc. (NASDAQ:CRUS): Develops high-precision analog and mixed-signal integrated circuits ((NYSE:ICS)). Market cap at $2.07B, most recent closing price at $28.62. Net institutional sales in the current quarter at -3.6M shares, which represents about 5.53% of the company's float of 65.07M shares. Revenue grew by 90.72% during the most recent quarter ($193.77M vs. $101.6M y/y). Inventory grew by 192.39% during the same time period ($144.88M vs. $49.55M y/y). Inventory, as a percentage of current assets, increased from 17.8% to 29.98% during the most recent quarter (comparing 13 weeks ending 2012-09-29 to 13 weeks ending 2011-09-24). The top 2 sellers of the stock are FMR, LLC, and King Luther Capital Management.

2. RDA Microelectronics, Inc. (NASDAQ:RDA): Designs, develops, and markets radio-frequency and mixed-signal semiconductors for cellular, broadcast, and connectivity applications. Market cap at $484.04M, most recent closing price at $11.48. Net institutional sales in the current quarter at -181.6K shares, which represents about 5.29% of the company's float of 3.43M shares. Revenue grew by 30.24% during the most recent quarter ($109.31M vs. $83.93M y/y). Inventory grew by 56.89% during the same time period ($58.49M vs. $37.28M y/y). Inventory, as a percentage of current assets, increased from 15.97% to 22.18% during the most recent quarter (comparing 3 months ending 2012-09-30 to 3 months ending 2011-09-30). The top 2 sellers of the stock are Royce & Associates, and Allianz Asset Management.

3. Advanced Micro Devices, Inc. (NASDAQ:AMD): Operates as a semiconductor company in the United States, Japan, China, and Europe. Market cap at $1.87B, most recent closing price at $2.64. Net institutional sales in the current quarter at -50.2M shares, which represents about 10.12% of the company's float of 496.27M shares. Revenue grew by -24.91% during the most recent quarter ($1,269M vs. $1,690M y/y). Inventory grew by 37.78% during the same time period ($744M vs. $540M y/y). Inventory, as a percentage of current assets, increased from 15.83% to 26.43% during the most recent quarter (comparing 13 weeks ending 2012-09-29 to 13 weeks ending 2011-10-01). The top 2 sellers of the stock are Putnam Asset Management, and Ameriprise Financial.

4. Cavium, Inc. (NASDAQ:CAVM): Designs, develops, and markets semiconductor processors for intelligent and secure networks. Market cap at $1.56B, most recent closing price at $31.15. Net institutional sales in the current quarter at -2.6M shares, which represents about 5.34% of the company's float of 48.69M shares. Revenue grew by -9.82% during the most recent quarter ($61.08M vs. $67.73M y/y). Inventory grew by 32.2% during the same time period ($44.09M vs. $33.35M y/y). Inventory, as a percentage of current assets, increased from 19.89% to 28.64% during the most recent quarter (comparing 3 months ending 2012-09-30 to 3 months ending 2011-09-30). The top 2 sellers of the stock are Goldman Sachs and William Blair.

*Accounting data sourced from Google Finance, institutional data sourced from Fidelity.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Business relationship disclosure: Business relationship disclosure: Kapitall is a team of analysts. This article was written by Sabina Bhatia, one of our writers. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article.

Source: Hedge Funds Selling These 4 Semiconductor Stocks With Troubling Inventory Trends