One of the great maxims of traders and Wall Street pros is to follow the "smart money."
I'm not much for the thesis that institutional shoppers tend to make smarter investing decisions, but many of you who've read my ruminations on insider buying say you'd also like to know how the Big Money is betting. Your wish is my command.
Next up: Integrated Silicon Solution
Foolish facts
|
Metric |
Integrated Silicon |
|---|---|
| CAPS stars (out of 5) | **** |
| Total ratings | 292 |
| Percent bulls | 94.9% |
| Percent bears | 5.1% |
| Bullish pitches | 15 out of 18 |
| Highest-rated peers |
Cypress Semiconductor |
Data current as of Nov. 24.
Many of our top Fools in CAPS like this stock as a value-meets-growth play. TSIF bet on it at $8.86 a share on May 20. TMFUltraLong took a position at $6.62 a share on Aug. 31. And mrindepdendent picked up Integrated Silicon $9.26 a share on Oct. 13.
"Integrated Silicon Solutions was selected from a value screen I use that looks for low forward P/Es, high [returns on equity], low price-book and reasonable price trends," mrindependent wrote in explaining his outperform call. "The screen typically outperforms by a wide margin and does best in up markets. ISSI happens to be a highly solvent, cash-rich tech company that is experiencing positive earnings trends."
So far, things haven't worked out for him. Integrated Silicon entered the day trading for $7.43 a share. But as all three of these All-Stars point out, valuation could help fuel a recovery. The stock trades for roughly half the long-term earnings growth that analysts expect.
Institutional ownership history
|
Top Owners |
2007* |
2008* |
2009* |
Latest* |
|---|---|---|---|---|
| BlackRock |
2,170 |
2,170 |
844,058 |
1,325,861 |
| Dimensional Fund Advisors |
2,921,781 |
2,023,324 |
2,125,700 |
1,292,150 |
| Bridgeway Capital Management |
498,400 |
313,541 |
371,041 |
923,541 |
| Renaissance Technologies |
1,728,292 |
1,984,102 |
1,593,302 |
678,002 |
| Donald Smith & Co. |
3,018,498 |
2,528,633 |
2,528,633 |
668,506 |
| TOP 25 TOTAL |
11,081,718 |
7,583,874 |
9,566,782 |
12,228,142 |
Source: Capital IQ, a division of Standard & Poor's.
*Indicates the number of shares owned.
Even so, not all institutions see Integrated Silicon as a bargain. The top 25 may be buying as a group, but four of the top five have cut their stakes this year. Some have cut back significantly.
For example, Renaissance Technologies trimmed its stake by 43% over the summer. Donald Smith & Co. has sold almost 2 million shares year-to-date, reducing its exposure by 74%. That's not selling. That's dumping.
Competitor and peer checkup
|
Company |
Institutional Ownership |
Insider Ownership |
|---|---|---|
|
Atmel |
81.95% | 3.65% |
| Cypress Semiconductor | 84.18% | 5.28% |
|
GSI Technology |
27.92% | 18.19% |
|
Integrated Device Technology |
94.13% | 0.19% |
| Integrated Silicon | 64.57% | 7.37% |
|
Micron Technology |
80.80% | 0.67% |
|
ON Semiconductor |
91.89% | 2.67% |
Source: Capital IQ, a division of Standard & Poor's. Data current as of Nov. 24.
Integrated Silicon looks extremely attractive compared with most of the peers on this table. Why? First, institutional ownership is low enough to allow for further Big Money buying. Second, insiders own enough to profit alongside shareholders as earnings grow.
In fact, the insider action may be telling when it comes to valuing Integrated Silicon's business. Executives and board members last sold at north of $11 per share, a better than 50% premium to what the stock trades for currently.
Now it's your turn to weigh in. Do you think the institutions are wrong about Integrated Silicon? Let us know what you think using the comments box below. You can also recommend other stocks for me to evaluate by sending me an email or replying to me on Twitter.
Interested in more info on Integrated Silicon? Add it to My Watchlist.
