Do Hedge Funds Love Lakeland Industries, Inc. (LAKE)?

Based on the fact that hedge funds have collectively under-performed the market for several years, it would be easy to assume that their stock picks simply aren’t very good. However, our research shows this not to be the case. In fact, when it comes to their very top picks collectively, they show a strong ability to pick winning stocks. Between November 1, 2014 and October 30 of this year, less than 49% of the stocks in the S&P 500 beat the market. However, hedge funds’ top 30 stock picks from the index had a much higher success rate than this, at 63%. The returns from these 30 stocks also easily bested the broader market, at 9.5% compared to 5.2%, despite there being a few duds in there like Micron and Anadarko (even their collective wisdom isn’t perfect). The results show that there is plenty of merit to imitating the collective wisdom of top investors.

Lakeland Industries, Inc. (NASDAQ:LAKE) investors should pay attention to an increase in hedge fund sentiment of late. Lakeland Industries, Inc. (NASDAQ:LAKE) was in 6 hedge funds’ portfolios at the end of the third quarter of 2015. There were 2 hedge funds in our database with Lakeland Industries, Inc. (NASDAQ:LAKE) 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 Nicholas Financial, Inc. (NASDAQ:NICK), Managed High Yield Plus Fund Inc. (NYSE:HYF), and BRT Realty Trust (NYSE:BRT) to gather more data points.

To the average investor, there are tons of signals shareholders use to evaluate stocks. Two of the most innovative signals are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the best picks of the best money managers can outclass their index-focused peers by a superb margin (see the details here).

With all of this in mind, let’s review the latest action surrounding Lakeland Industries, Inc. (NASDAQ:LAKE).

Hedge fund activity in Lakeland Industries, Inc. (NASDAQ:LAKE)

Heading into Q4, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 200% from one quarter earlier. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies has the number one position in Lakeland Industries, Inc. (NASDAQ:LAKE), worth close to $5.8 million, corresponding to less than 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Iszo Capital, managed by Brian Sheehy, which holds a $3.5 million position; 2% of its 13F portfolio is allocated to the company. Remaining peers that hold long positions contain Peter Algert and Kevin Coldiron’s Algert Coldiron Investors, Mike Vranos’s Ellington, and Israel Englander’s Millennium Management.

Consequently, key hedge funds have jumped into Lakeland Industries, Inc. (NASDAQ:LAKE) headfirst. Algert Coldiron Investors initiated a $0.7 million position during the quarter. The other funds with new positions in the stock are Mike Vranos’s Ellington, Israel Englander’s Millennium Management, and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.

Let’s also examine hedge fund activity in other stocks similar to Lakeland Industries, Inc. (NASDAQ:LAKE). We will take a look at Nicholas Financial, Inc. (NASDAQ:NICK), Managed High Yield Plus Fund Inc. (NYSE:HYF), BRT Realty Trust (NYSE:BRT), and Cerulean Pharma Inc (NASDAQ:CERU). All of these stocks’ market caps are closest to Lakeland Industries, Inc. (NASDAQ:LAKE)’s market cap.

As you can see, these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $9 million. That figure was $11 million in Lakeland Industries, Inc. (NASDAQ:LAKE)’s case. Cerulean Pharma Inc (NASDAQ:CERU) is the most popular stock in this table. On the other hand, Nicholas Financial, Inc. (NASDAQ:NICK) is the least popular one with only 4 bullish hedge fund positions. Lakeland Industries, Inc. (NASDAQ:LAKE) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Cerulean Pharma Inc (NASDAQ:CERU) might be a better candidate to consider a long position.