Hedge Funds Are Selling Logitech International SA (USA) (LOGI)

Between June 25 and October 30th the Russell 2000 ETF (IWM) lagged the larger S&P 500 ETF (SPY) by more than 14 percentage points as investors worried over the possible ramifications of rising interest rates. The hedge funds and institutional investors we track typically invest more in smaller-cap stocks than an average investor, and we have seen data that shows those funds paring back their overall exposure. Those funds cutting positions in small-caps is one reason why volatility has increased. In the following paragraphs, we take a closer look at what hedge funds and prominent investors think of Logitech International SA (USA) (NASDAQ:LOGI) and see how the stock is affected by the recent hedge fund activity.

Logitech International SA (USA) (NASDAQ:LOGI) was in 7 hedge funds’ portfolios at the end of the third quarter of 2015. LOGI investors should be aware of a decrease in activity from the world’s largest hedge funds recently. There were 11 hedge funds in our database with LOGI 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 UniFirst Corp (NYSE:UNF), Marriott Vacations Worldwide Corp (NYSE:VAC), and Swift Transportation Co (NYSE:SWFT) to gather more data points.

To the average investor there are a multitude of signals shareholders employ to appraise stocks. Two of the less known signals are hedge fund and insider trading indicators. We have shown that, historically, those who follow the best picks of the top hedge fund managers can outpace the broader indices by a significant amount (see the details here).

With all of this in mind, let’s go over the recent action encompassing Logitech International SA (USA) (NASDAQ:LOGI).

Hedge fund activity in Logitech International SA (USA) (NASDAQ:LOGI)

At the end of the third quarter, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a change of -36% from the second quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies holds the most valuable position in Logitech International SA (USA) (NASDAQ:LOGI). Renaissance Technologies has an $14.5 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Renaissance Technologies’s heels is D E Shaw, led by D. E. Shaw, holding an $3.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining peers that hold long positions consist of Matthew Hulsizer’s PEAK6 Capital Management, and Chuck Royce’s Royce & Associates.

Due to the fact that Logitech International SA (USA) (NASDAQ:LOGI) has experienced falling interest from the smart money, we can see that there was a specific group of funds who sold off their positions entirely heading into Q4. Interestingly, Robert B. Gillam’s McKinley Capital Management dumped the biggest position of the 700 funds followed by Insider Monkey, worth about $6.9 million in stock, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners was right behind this move, as the fund dumped about $0.8 million worth. These moves are important to note, as total hedge fund interest was cut by 4 funds heading into Q4.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Logitech International SA (USA) (NASDAQ:LOGI) but similarly valued. These stocks are UniFirst Corp (NYSE:UNF), Marriott Vacations Worldwide Corp (NYSE:VAC), Swift Transportation Co (NYSE:SWFT), and Washington Federal Inc. (NASDAQ:WAFD). All of these stocks’ market caps match LOGI’s market cap.

As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $179 million, versus $20 million in LOGI’s case. Swift Transportation Co (NYSE:SWFT) is the most popular stock in this table, while Washington Federal Inc. (NASDAQ:WAFD) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Logitech International SA (USA) (NASDAQ:LOGI) is even less popular than WAFD. 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.