Legendary investors such as Jeffrey Talpins and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those elite funds in these small-cap stocks. In the following paragraphs, we analyze LogMeIn Inc (NASDAQ:LOGM) from the perspective of those elite funds.
Is LogMeIn Inc (NASDAQ:LOGM) a buy right now? Money managers are taking a pessimistic view. The number of long hedge fund positions went down by 1 in recent months. Our calculations also showed that logm isn’t among the 30 most popular stocks among hedge funds. LOGM was in 27 hedge funds’ portfolios at the end of March. There were 28 hedge funds in our database with LOGM holdings at the end of the previous quarter.
If you’d ask most shareholders, hedge funds are perceived as slow, outdated financial tools of the past. While there are over 8000 funds trading at the moment, Our researchers choose to focus on the aristocrats of this group, approximately 750 funds. These investment experts direct the lion’s share of the hedge fund industry’s total capital, and by tailing their best investments, Insider Monkey has unsheathed many investment strategies that have historically outpaced Mr. Market. Insider Monkey’s flagship hedge fund strategy defeated the S&P 500 index by around 5 percentage points annually since its inception in May 2014 through the end of May. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 30.9% since February 2017 (through May 30th) even though the market was up nearly 24% during the same period. We just shared a list of 5 short targets in our latest quarterly update and they are already down an average of 11.9% in less than a couple of weeks whereas our long picks outperformed the market by 2 percentage points in this volatile 2 week period.
Cliff Asness of AQR Capital Management
Let’s view the key hedge fund action surrounding LogMeIn Inc (NASDAQ:LOGM).
Hedge fund activity in LogMeIn Inc (NASDAQ:LOGM)
At Q1’s end, a total of 27 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -4% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards LOGM over the last 15 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in LogMeIn Inc (NASDAQ:LOGM) was held by Alyeska Investment Group, which reported holding $142.8 million worth of stock at the end of March. It was followed by Renaissance Technologies with a $81.6 million position. Other investors bullish on the company included AQR Capital Management, Citadel Investment Group, and Millennium Management.
Since LogMeIn Inc (NASDAQ:LOGM) has experienced bearish sentiment from the smart money, it’s safe to say that there were a few hedge funds that decided to sell off their full holdings last quarter. Intriguingly, Paul Singer’s Elliott Management cut the largest stake of all the hedgies monitored by Insider Monkey, totaling close to $97.9 million in stock, and Peter S. Park’s Park West Asset Management was right behind this move, as the fund cut about $29.4 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 1 funds last quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as LogMeIn Inc (NASDAQ:LOGM) but similarly valued. We will take a look at Cousins Properties Incorporated (NYSE:CUZ), Pebblebrook Hotel Trust (NYSE:PEB), Floor & Decor Holdings, Inc. (NYSE:FND), and Healthcare Realty Trust Inc (NYSE:HR). This group of stocks’ market values are closest to LOGM’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CUZ | 22 | 137516 | 5 |
| PEB | 10 | 78480 | -2 |
| FND | 31 | 406072 | 12 |
| HR | 14 | 80226 | 5 |
| Average | 19.25 | 175574 | 5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.25 hedge funds with bullish positions and the average amount invested in these stocks was $176 million. That figure was $483 million in LOGM’s case. Floor & Decor Holdings, Inc. (NYSE:FND) is the most popular stock in this table. On the other hand Pebblebrook Hotel Trust (NYSE:PEB) is the least popular one with only 10 bullish hedge fund positions. LogMeIn Inc (NASDAQ:LOGM) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately LOGM wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on LOGM were disappointed as the stock returned -8.7% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
