The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge funds have been producing disappointing net returns in recent years, however that was partly due to the poor performance of small-cap stocks in general. Well, small-cap stocks finally turned the corner and have been beating the large-cap stocks by more than 10 percentage points over the last 5 months.This means the relevancy of hedge funds’ public filings became inarguable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Lumber Liquidators Holdings Inc (NYSE:LL) .
Lumber Liquidators Holdings Inc (NYSE:LL) has seen an increase in hedge fund interest lately. LL was in 14 hedge funds’ portfolios at the end of September. There were 12 hedge funds in our database with LL 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 A10 Networks Inc (NYSE:ATEN), Healthways, Inc. (NASDAQ:HWAY), and Modine Manufacturing Co. (NYSE:MOD) to gather more data points.
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Follow Ll Flooring Holdings Inc. (NYSE:LL)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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With all of this in mind, we’re going to take a glance at the key action surrounding Lumber Liquidators Holdings Inc (NYSE:LL).
How are hedge funds trading Lumber Liquidators Holdings Inc (NYSE:LL)?
At Q3’s end, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 17% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in LL over the last 5 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, David E. Shaw’s D E Shaw has the largest position in Lumber Liquidators Holdings Inc (NYSE:LL), worth close to $12.7 million, comprising less than 0.1% of its total 13F portfolio. Coming in second is Ariel Investments, led by John W. Rogers, holding a $9.6 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism include Bernard Selz’s Selz Capital, Chuck Royce’s Royce & Associates and Jerome L. Simon’s Lonestar Capital Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
As one would reasonably expect, key hedge funds were breaking ground themselves. Lonestar Capital Management, led by Jerome L. Simon, created the largest position in Lumber Liquidators Holdings Inc (NYSE:LL). According to regulatory filings, the fund had $4.5 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $4.2 million investment in the stock during the quarter. The other funds with brand new LL positions are Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Robert Pohly’s Samlyn Capital, and Zach Schreiber’s Point State Capital.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Lumber Liquidators Holdings Inc (NYSE:LL) but similarly valued. These stocks are A10 Networks Inc (NYSE:ATEN), Healthways, Inc. (NASDAQ:HWAY), Modine Manufacturing Co. (NYSE:MOD), and Stoneridge, Inc. (NYSE:SRI). This group of stocks’ market caps are closest to LL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ATEN | 16 | 61946 | 3 |
| HWAY | 19 | 279048 | 1 |
| MOD | 10 | 43734 | -1 |
| SRI | 24 | 100450 | 3 |
As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $121 million. That figure was $62 million in LL’s case. Stoneridge, Inc. (NYSE:SRI) is the most popular stock in this table. On the other hand Modine Manufacturing Co. (NYSE:MOD) is the least popular one with only 10 bullish hedge fund positions. Lumber Liquidators Holdings Inc (NYSE:LL) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SRI might be a better candidate to consider taking a long position in.
Disclosure: none.
