World-class money managers like Ken Griffin and Barry Rosenstein only invest their wealthy clients’ money after undertaking a rigorous examination of any potential stock. They are particularly successful in this regard when it comes to small-cap stocks, which their peerless research gives them a big information advantage on when it comes to judging their worth. It’s not surprising then that they generate their biggest returns from these stocks and invest more of their money in these stocks on average than other investors. It’s also not surprising then that we pay close attention to these picks ourselves and have built a market-beating investment strategy around them.
Is Logitech International SA (NASDAQ:LOGI) a good investment right now? Investors who are in the know are betting on the stock. The number of long hedge fund positions advanced by 3 in recent months. Our calculations also showed that logi isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We’re going to analyze the recent hedge fund action surrounding Logitech International SA (NASDAQ:LOGI).
How have hedgies been trading Logitech International SA (NASDAQ:LOGI)?
At Q3’s end, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 19% from the previous quarter. The graph below displays the number of hedge funds with bullish position in LOGI over the last 13 quarters. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in Logitech International SA (NASDAQ:LOGI), which was worth $117.8 million at the end of the third quarter. On the second spot was Arrowstreet Capital which amassed $62 million worth of shares. Moreover, Two Sigma Advisors, Blue Mountain Capital, and Columbus Circle Investors were also bullish on Logitech International SA (NASDAQ:LOGI), allocating a large percentage of their portfolios to this stock.
As aggregate interest increased, key money managers were leading the bulls’ herd. Millennium Management, managed by Israel Englander, initiated the most outsized position in Logitech International SA (NASDAQ:LOGI). Millennium Management had $5.8 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also initiated a $1.8 million position during the quarter. The following funds were also among the new LOGI investors: Dmitry Balyasny’s Balyasny Asset Management and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Logitech International SA (NASDAQ:LOGI) but similarly valued. These stocks are Nutanix, Inc. (NASDAQ:NTNX), Ares Capital Corporation (NASDAQ:ARCC), Hubbell Incorporated (NYSE:HUBB), and Jefferies Financial Group Inc. (NYSE:JEF). This group of stocks’ market caps resemble LOGI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NTNX | 39 | 652637 | 5 |
| ARCC | 25 | 285375 | 2 |
| HUBB | 27 | 780075 | 5 |
| JEF | 39 | 724586 | 5 |
| Average | 32.5 | 610668 | 4.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.5 hedge funds with bullish positions and the average amount invested in these stocks was $611 million. That figure was $286 million in LOGI’s case. Nutanix, Inc. (NASDAQ:NTNX) is the most popular stock in this table. On the other hand Ares Capital Corporation (NASDAQ:ARCC) is the least popular one with only 25 bullish hedge fund positions. Compared to these stocks Logitech International SA (NASDAQ:LOGI) is even less popular than ARCC. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
Disclosure: None. This article was originally published at Insider Monkey.
