Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Littelfuse, Inc. (NASDAQ:LFUS).
Is Littelfuse, Inc. (NASDAQ:LFUS) a buy here? Prominent investors were cutting their exposure. The number of bullish hedge fund positions were cut by 3 recently. Littelfuse, Inc. (NASDAQ:LFUS) was in 24 hedge funds’ portfolios at the end of September. The all time high for this statistic is 27. Our calculations also showed that LFUS isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 27 hedge funds in our database with LFUS holdings at the end of June.
John Rogers of Ariel Investments
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now we’re going to analyze the key hedge fund action encompassing Littelfuse, Inc. (NASDAQ:LFUS).
Do Hedge Funds Think LFUS Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -11% from one quarter earlier. By comparison, 22 hedge funds held shares or bullish call options in LFUS a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
More specifically, Impax Asset Management was the largest shareholder of Littelfuse, Inc. (NASDAQ:LFUS), with a stake worth $224.2 million reported as of the end of September. Trailing Impax Asset Management was Ariel Investments, which amassed a stake valued at $94.9 million. Fisher Asset Management, Polar Capital, and GAMCO Investors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Ayrshire Capital Management allocated the biggest weight to Littelfuse, Inc. (NASDAQ:LFUS), around 2.01% of its 13F portfolio. Prospector Partners is also relatively very bullish on the stock, earmarking 1.62 percent of its 13F equity portfolio to LFUS.
Due to the fact that Littelfuse, Inc. (NASDAQ:LFUS) has faced declining sentiment from the entirety of the hedge funds we track, logic holds that there was a specific group of hedgies who were dropping their full holdings by the end of the third quarter. At the top of the heap, Phill Gross and Robert Atchinson’s Adage Capital Management sold off the largest position of all the hedgies watched by Insider Monkey, worth close to $21.5 million in stock. Lee Ainslie’s fund, Maverick Capital, also said goodbye to its stock, about $1.1 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 3 funds by the end of the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Littelfuse, Inc. (NASDAQ:LFUS). These stocks are Colfax Corporation (NYSE:CFX), nCino, Inc. (NASDAQ:NCNO), Frontier Communications Parent Inc. (NASDAQ:FYBR), Ritchie Bros. Auctioneers (NYSE:RBA), Thor Industries, Inc. (NYSE:THO), Medpace Holdings, Inc. (NASDAQ:MEDP), and Kinross Gold Corporation (NYSE:KGC). This group of stocks’ market valuations are similar to LFUS’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CFX | 23 | 819033 | -8 |
| NCNO | 21 | 582525 | -4 |
| FYBR | 43 | 3539483 | 0 |
| RBA | 13 | 277550 | -9 |
| THO | 29 | 174266 | 3 |
| MEDP | 23 | 424211 | -1 |
| KGC | 27 | 321000 | -1 |
| Average | 25.6 | 876867 | -2.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.6 hedge funds with bullish positions and the average amount invested in these stocks was $877 million. That figure was $526 million in LFUS’s case. Frontier Communications Parent Inc. (NASDAQ:FYBR) is the most popular stock in this table. On the other hand Ritchie Bros. Auctioneers (NYSE:RBA) is the least popular one with only 13 bullish hedge fund positions. Littelfuse, Inc. (NASDAQ:LFUS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for LFUS is 47. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. A small number of hedge funds were also right about betting on LFUS as the stock returned 10% since the end of the third quarter (through 12/9) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
