Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4 years and analyze what the smart money thinks of LCI Industries (NYSE:LCII) based on that data.
LCI Industries (NYSE:LCII) investors should pay attention to an increase in enthusiasm from smart money lately. Our calculations also showed that LCII isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
According to most investors, hedge funds are assumed to be worthless, outdated financial vehicles of years past. While there are greater than 8000 funds trading at present, Our experts hone in on the leaders of this group, approximately 750 funds. Most estimates calculate that this group of people administer the majority of all hedge funds’ total capital, and by watching their highest performing picks, Insider Monkey has figured out many investment strategies that have historically outstripped the broader indices. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points annually since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Noam Gottesman of GLG Partners
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. We’re going to take a gander at the new hedge fund action encompassing LCI Industries (NYSE:LCII).
Hedge fund activity in LCI Industries (NYSE:LCII)
At Q3’s end, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 40% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards LCII over the last 17 quarters. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
The largest stake in LCI Industries (NYSE:LCII) was held by Royce & Associates, which reported holding $63.9 million worth of stock at the end of September. It was followed by Millennium Management with a $10.5 million position. Other investors bullish on the company included Citadel Investment Group, GLG Partners, and Arrowstreet Capital. In terms of the portfolio weights assigned to each position Royce & Associates allocated the biggest weight to LCI Industries (NYSE:LCII), around 0.59% of its 13F portfolio. Ellington is also relatively very bullish on the stock, designating 0.06 percent of its 13F equity portfolio to LCII.
As one would reasonably expect, key money managers have been driving this bullishness. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the biggest position in LCI Industries (NYSE:LCII). Arrowstreet Capital had $3.8 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace also made a $3.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Cliff Asness’s AQR Capital Management, Paul Tudor Jones’s Tudor Investment Corp, and Joel Greenblatt’s Gotham Asset Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as LCI Industries (NYSE:LCII) but similarly valued. We will take a look at Beacon Roofing Supply, Inc. (NASDAQ:BECN), Natera Inc (NASDAQ:NTRA), Seaspan Corporation (NYSE:SSW), and ExlService Holdings, Inc. (NASDAQ:EXLS). This group of stocks’ market caps are similar to LCII’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BECN | 21 | 331266 | 5 |
| NTRA | 22 | 270162 | 2 |
| SSW | 12 | 855040 | 5 |
| EXLS | 14 | 48976 | 3 |
| Average | 17.25 | 376361 | 3.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.25 hedge funds with bullish positions and the average amount invested in these stocks was $376 million. That figure was $99 million in LCII’s case. Natera Inc (NASDAQ:NTRA) is the most popular stock in this table. On the other hand Seaspan Corporation (NYSE:SSW) is the least popular one with only 12 bullish hedge fund positions. LCI Industries (NYSE:LCII) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on LCII as the stock returned 15.9% during the first two months of Q4 and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
