What do the top Hedge Fund and Mutual Fund Gurus like in the Semiconductor Manufacturing Industry? This article, the twenty-fourth in a series, identifies through research of the latest available institutional 13-F filings the Gurus who are most invested in the Semiconductor Manufacturing Industry, and the specific stocks within that industry segment that they prefer to hold in their portfolios. The Semiconductor Manufacturing industry includes memory, storage and microprocessor chip manufacturing companies, wireless and networking chip manufacturing companies, and also those manufacturing digital, analog, logic and graphics ICs.
Also, please note that this article will be among the last in this series, as the latest March 2011, quarter 13-F Institutional filings are now beginning to come out. About 40% were out as of this weekend, and most should be filed by the end of this week. As such, once 13-F filings are complete for all Guru funds, in the next series starting the end of this week to the beginning of next week, I will bring to you the ‘Top New and Added Picks’ of Guru Funds by industry/sector, detailing not the top holdings, but more importantly what ‘New’ positions they took and what existing positions they added to in the latest March 2011, quarter.
The first twenty articles in the series identified Gurus that are over-weight in the Solar sector
, Utilities sector
, China stocks
, Airline sector
, Optical Networking sector
, Chemicals industry
, Oil and Gas Exploration Industry
, the Automobile Industry
, the Biotech Industry
, the Consumer Non-Durable Goods Sector
, the Gold and Silver Mining Industry
, and the Regional Banking Industry
, the Insurance Industry
, the Computer Hardware and Peripherals Industry
, the Big Pharmaceuticals and Generic Pharmaceuticals segments
, the Money Center and Foreign Bank Sector
, the Semiconductor Equipment Industry
, the Broadcasting and Publishing Industry
, the Computer Software Industry
, and the Foreign Telecommunications Services Industry
, and the and the stocks within those industries/sectors that they hold in their portfolios (For those familiar with the series, skip over to the seventh paragraph).
A Guru is defined as someone who is regarded as having great knowledge, wisdom, and authority in a certain area. When it comes to hedge funds, there are a number of ways to anoint leading managers as Gurus including long-term performance, low portfolio volatility and an elite reputation in the investment community.
Many of us are familiar with leading investors and hedge fund managers such as Warren Buffett, George Soros, Carl Icahn and Julian Robertson, but the hedge fund community alone includes over 9,000 funds; add in mutual funds, ETFs, and other investment entities and the number is likely to be at least two to three times that number. While there is no official list of Gurus, less than one percent or between 100 to 200 fund managers are commonly believed by the larger investment community to have earned the distinction of being called Gurus.
The study of the investing habits of Gurus can be informative as these are very savvy, well-respected investors with high personal net worth deploying large sums of capital from their funds on a regular basis. They have a long-term track record of success, and while one can easily just ride their coattails, the savvy investor may want to use these lists as a starting point to conduct their own due diligence.
The total capitalization of the US Equity markets is somewhere in the $15 trillion range, and the total market capitalization of semiconductor manufacturing companies is $370 billion or 2.5% of the overall market. The Table lists five investment Gurus whose funds have invested at least one-and-a-half times that or at least 3.75% in the Semiconductor Manufacturing Industry. The following is a list of the top Semiconductor Manufacturing Company picks of Guru Funds over-concentrated in that Sector:
- Microprocessor Semiconductor Manufacturing companies such as Intel Corp. (NASDAQ:INTC), a manufacturer of micro-processors, chipsets, network processors, motherboards, and non-volatile memory.
- Foundries such as Texas Instruments (NYSE:TXN), a manufacturer of ICs and digital signal processors used in cell phones, navigation systems and PCs; and STMicroelectronics (NYSE:STM), a Swiss manufacturer of ICs used in automotive products, computer peripherals, telecommunication systems, and consumer products.
- Memory and Storage Semiconductor Manufacturing companies such as Micron Technology Inc. (NASDAQ:MU), a manufacturer of DRAM, non-volatile flash memory, and image sensors used in computers, servers, and consumer electronics; Atmel Corp. (NASDAQ:ATML), a manufacturer of micro-controllers, application specific ICs, non-volatile memory and RF components.
- Wireless semiconductor manufacturing companies such as RF Micro Devices Inc. (RFMD), a manufacturer of RF Integrated Circuits used in mobile devices, base stations, wireless LANs, and global positioning systems; Aeroflex Holding Corp. (NYSE:ARX), a manufacturer of micro-electronics and wireless and RF test systems for telecom and aerospace/defense markets.
- Diodes Incorporated (NASDAQ:DIOD), a manufacturer of discrete and analog IC products, including diodes, rectifiers, transistors and power management devices.
- ON Semiconductor Corp. (ONNN), a manufacturer of power, analog, digital signal processing, mixed signal, advanced logic and data management ICs.
- Semiconductor Manufacturing International ADR (NYSE:SMI), a Chinese manufacturer of mixed signal, RF, logic, embedded, micro-display and non-volatile ICs.
- Linear Technology Corp. (NASDAQ:LLTC), a manufacturer of standard linear ICs for industrial, space/military, automotive, telecom, computer and consumer markets.
Fund and Guru
Type of Fund
Assets Under Management
Percent Equity Portfolio invested in Equities of Companies in Semiconductor Manufacturing Industry
Major Semiconductor Manufacturing company positions in Portfolio
Soros Fund Management LLC (George Soros)
Hedge Fund - Long/Short
$ 5.1 billion
RFMD, DIOD, ONNN, ARX
Donald Smith & Co., Inc. (Donald G. Smith)
Hedge Fund and Mutual Funds - Deep Value
$ 3.2 billion
Brandes Investment Partners, LP (Charles Brandes)
Investment Advisory Firm - Value-oriented
$ 46 billion including $16 billion in US Equities
TXN, INTC, STM
Weitz Wallace R & Co (Wallace Weitz)
$ 2.3 billion
First Eagle Investment Management, LLC (Jean-Marie Eveillard)
$ 19.7 billion
TXN, LLTC, INTC, ATML
Mr. Soros is a Hungarian-born renowned American investor, most famous for his spearheading the Quantum Fund that is believed to have single-handedly broken the Bank of England in 1992, forcing it to devalue the pound. A mere $1,000 invested in 1969 when Soros established the Quantum Fund would have been worth $4 million by the year 2000, achieving a cumulative return of 32%.
With total assets under management (AUM) of $3.2 billion, hedge fund Donald Smith & Co., Inc., headed by Guru Donald G. Smith, was founded 30 years ago and invests in out-of-favor companies selling in the bottom decile of price-to-tangible book value ratios, and that have significant earnings potential over the next 2-4 years.
Brandes Investment Partners, LP, founded by Guru Charles Brandes in 1974, manages $46 billion in equity and fixed income investments for institutional and private clients worldwide, including over $16 billion in US Equities. Brandes makes security selection based on the value investing approach pioneered by Benjamin Graham.
Jean-Marie Eveillard is Senior Investment Adviser for First Eagle Investment Management, a $19.7 billion Mutual Fund company. He served for more than a quarter century as a portfolio manager, and was co-honored in 2001 by Morningstar, Inc. as "Stock Manager of the Year." He invests using a bottom-up value-oriented approach.
Credit: Historical fundamentals including operating metrics and stock ownership information were derived using I-Metrix® by Edgar Online®, Zacks Investment Research, DailyGraphs®, Thomson Reuters and Briefing.com. Fund data including assets under management and firm profiles are sourced mostly from Hedgetracker.com. The information and data is believed to be accurate, but no guarantees or representations are made.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Disclaimer: Material presented here is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. Further, these are my opinions and I may be wrong. I may have positions in securities mentioned in this article. You should take this into consideration before acting on any advice given in this article. If this makes you uncomfortable, then do not listen to my thoughts and opinions. The contents of this article do not take into consideration your individual investment objectives so consult with your own financial adviser before making an investment decision. Investing includes certain risks including loss of principal.