Is FLIR Systems, Inc. (FLIR) A Good Stock To Buy?

Insider Monkey finished processing more than 700 13F filings made by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30. In this article we are going to take a look at smart money sentiment towards FLIR Systems, Inc. (NASDAQ:FLIR).

FLIR Systems, Inc. (NASDAQ:FLIR) investors should be aware of an increase in support from the world’s most elite money managers recently. FLIR was in 26 hedge funds’ portfolios at the end of September. There were 20 hedge funds in our database with FLIR positions 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 Energen Corporation (NYSE:EGN), MAXIMUS, Inc. (NYSE:MMS), and Bio-Rad Laboratories, Inc. (NYSE:BIO) to gather more data points.

If you’d ask most investors, hedge funds are assumed to be underperforming, outdated investment tools of the past. While there are over 8000 funds in operation at the moment, Our researchers hone in on the top tier of this group, approximately 700 funds. Most estimates calculate that this group of people command most of the hedge fund industry’s total asset base, and by following their best equity investments, Insider Monkey has determined a number of investment strategies that have historically defeated Mr. Market. Insider Monkey’s small-cap hedge fund strategy outpaced the S&P 500 index by 12 percentage points per annum for a decade in their back tests.

With all of this in mind, let’s take a gander at the recent action encompassing FLIR Systems, Inc. (NASDAQ:FLIR).

What have hedge funds been doing with FLIR Systems, Inc. (NASDAQ:FLIR)?

At Q3’s end, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 30% from the second quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their holdings substantially (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Chuck Royce’s Royce & Associates has the largest position in FLIR Systems, Inc. (NASDAQ:FLIR), worth close to $48.1 million, accounting for 0.3% of its total 13F portfolio. Sitting at the No. 2 spot is D E Shaw holding an $37.6 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining members of the smart money with similar optimism include Wallace Weitz’s Wallace R. Weitz & Co., Peter S. Park’s Park West Asset Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

With a general bullishness amongst the heavyweights, key money managers have jumped into FLIR Systems, Inc. (NASDAQ:FLIR) headfirst. PDT Partners, managed by Peter Muller, established the largest position in FLIR Systems, Inc. (NASDAQ:FLIR). PDT Partners had $1 million invested in the company at the end of the quarter. David Harding’s Winton Capital Management also made an $0.9 million investment in the stock during the quarter. The other funds with brand new FLIR positions are Matthew Tewksbury’s Stevens Capital Management, George Hall’s Clinton Group, and Michael Platt and William Reeves’s BlueCrest Capital Mgmt..

Let’s now review hedge fund activity in other stocks similar to FLIR Systems, Inc. (NASDAQ:FLIR). We will take a look at Energen Corporation (NYSE:EGN), MAXIMUS, Inc. (NYSE:MMS), Bio-Rad Laboratories, Inc. (NYSE:BIO), and Lincoln Electric Holdings, Inc. (NASDAQ:LECO). This group of stocks’ market valuations resemble FLIR’s market valuation.

As you can see these stocks had an average of 20.5 hedge funds with bullish positions and the average amount invested in these stocks was $313 million. That figure was $213 million in FLIR’s case. Bio-Rad Laboratories, Inc. (NYSE:BIO) is the most popular stock in this table. On the other hand MAXIMUS, Inc. (NYSE:MMS) is the least popular one with only 10 bullish hedge fund positions. FLIR Systems, Inc. (NASDAQ:FLIR) 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 BIO might be a better candidate to consider a long position.