Is Landauer, Inc. (LDR) A Good Stock To Buy?

Hedge funds are not perfect. They have their bad picks just like everyone else. Micron, a stock hedge funds have loved, lost 50% during the last 12 months ending on October 30. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 30 S&P 500 stocks among hedge funds at the end of September 2014 yielded an average return of 9.5% in the same time period, vs. a gain of 5.2% for the S&P 500 Index. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of Landauer, Inc. (NYSE:LDR).

Landauer, Inc. (NYSE:LDR) was in 7 hedge funds’ portfolios at the end of the third quarter of 2015. LDR shareholders have witnessed an increase in activity from the world’s largest hedge funds in recent months. There were 6 hedge funds in our database with LDR 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 Spok Holdings Inc (NASDAQ:SPOK), Jive Software Inc (NASDAQ:JIVE), and Powell Industries, Inc. (NASDAQ:POWL) to gather more data points.

If you’d ask most shareholders, hedge funds are viewed as unimportant, old investment vehicles of yesteryear. While there are greater than 8000 funds with their doors open at the moment, We choose to focus on the crème de la crème of this group, around 700 funds. These money managers manage bulk of the hedge fund industry’s total asset base, and by observing their best equity investments, Insider Monkey has revealed several investment strategies that have historically exceeded the market. Insider Monkey’s small-cap hedge fund strategy outpaced the S&P 500 index by 12 percentage points a year for a decade in their back tests.

Keeping this in mind, let’s take a look at the key action regarding Landauer, Inc. (NYSE:LDR).

How are hedge funds trading Landauer, Inc. (NYSE:LDR)?

Heading into Q4, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Chuck Royce’s Royce & Associates has the most valuable position in Landauer, Inc. (NYSE:LDR), worth close to $37.7 million, accounting for 0.2% of its total 13F portfolio. Sitting at the No. 2 spot is Harvey Partners, led by Jeffrey Moskowitz, holding an $5.9 million position; 3.7% of its 13F portfolio is allocated to the company. Remaining members of the smart money that hold long positions comprise Mario Gabelli’s GAMCO Investors, Jim Simons’s Renaissance Technologies and Andy Redleaf’s Whitebox Advisors.

As aggregate interest increased, key hedge funds were leading the bulls’ herd. Whitebox Advisors, managed by Andy Redleaf, established a position in Landauer, Inc. (NYSE:LDR). Whitebox Advisors had $0.2 million invested in the company at the end of the quarter. Michael Platt and William Reeves’s BlueCrest Capital Mgmt. also initiated an $0.2 million position during the quarter.

Let’s also examine hedge fund activity in other stocks similar to Landauer, Inc. (NYSE:LDR). These stocks are Spok Holdings Inc (NASDAQ:SPOK), Jive Software Inc (NASDAQ:JIVE), Powell Industries, Inc. (NASDAQ:POWL), and Bank Mutual Corporation (NASDAQ:BKMU). This group of stocks’ market valuations match LDR’s market valuation.

As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $32 million. That figure was $49 million in LDR’s case. Jive Software Inc (NASDAQ:JIVE) is the most popular stock in this table. On the other hand, Bank Mutual Corporation (NASDAQ:BKMU) is the least popular one with only 6 bullish hedge fund positions. Landauer, Inc. (NYSE:LDR) is not the least popular stock in this group, but still hedge fund has not attracted much attention from investors. This is may indicate it is not a good stock to buy; therefore, we’d rather spend our time researching stocks that hedge funds are piling on. In this particular group JIVE might be a better candidate to consider a long position.