Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
Louisiana-Pacific Corporation (NYSE:LPX) was in 20 hedge funds’ portfolios at the end of September. LPX investors should pay attention to an increase in support from the world’s most elite money managers lately. There were 16 hedge funds in our database with LPX positions at the end of the previous quarter. At the end of this article we will also compare LPX to other stocks including Monolithic Power Systems, Inc. (NASDAQ:MPWR), Rowan Companies PLC (NYSE:RDC), and WESCO International, Inc. (NYSE:WCC) to get a better sense of its popularity.
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Now, we’re going to take a glance at the recent action regarding Louisiana-Pacific Corporation (NYSE:LPX).
What have hedge funds been doing with Louisiana-Pacific Corporation (NYSE:LPX)?
At Q3’s end, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Citadel Investment Group, managed by Ken Griffin, holds the largest position in Louisiana-Pacific Corporation (NYSE:LPX). Citadel Investment Group has a $77.4 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Adage Capital Management, led by Phill Gross and Robert Atchinson, holding a $76.2 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism include Jeffrey Altman’s Owl Creek Asset Management, Steve Cohen’s Point72 Asset Management and Michael Kaufman’s MAK Capital One.
With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. Balyasny Asset Management, managed by Dmitry Balyasny, created the biggest position in Louisiana-Pacific Corporation (NYSE:LPX). Balyasny Asset Management had $11.1 million invested in the company at the end of the quarter. David Keidan’s Buckingham Capital Management also made a $10.6 million investment in the stock during the quarter. The following funds were also among the new LPX investors: Douglas Dillard Jr. and Raj D. Venkatesan’s Standard Pacific Capital, D E Shaw, and Jacob Gottlieb’s Visium Asset Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Louisiana-Pacific Corporation (NYSE:LPX) but similarly valued. These stocks are Monolithic Power Systems, Inc. (NASDAQ:MPWR), Rowan Companies PLC (NYSE:RDC), WESCO International, Inc. (NYSE:WCC), and Laredo Petroleum Inc (NYSE:LPI). This group of stocks’ market values resemble LPX’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MPWR | 16 | 220382 | 0 |
| RDC | 21 | 481508 | -3 |
| WCC | 20 | 351076 | -3 |
| LPI | 20 | 226912 | -3 |
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 $320 million. That figure was $327 million in LPX’s case. Rowan Companies PLC (NYSE:RDC) is the most popular stock in this table. On the other hand Monolithic Power Systems, Inc. (NASDAQ:MPWR) is the least popular one with only 16 bullish hedge fund positions. Louisiana-Pacific Corporation (NYSE:LPX) 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 RDC might be a better candidate to consider a long position.
