We can judge whether West Marine, Inc. (NASDAQ:WMAR) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, research shows that these picks historically outperformed the market when we factor in known risk factors.
West Marine, Inc. (NASDAQ:WMAR) investors should pay attention to a decrease in hedge fund sentiment in recent months. At the end of this article we will also compare WMAR to other stocks including CECO Environmental Corp. (NASDAQ:CECE), LeMaitre Vascular Inc (NASDAQ:LMAT), and Lipocine Inc (NASDAQ:LPCN) to get a better sense of its popularity.
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Keeping this in mind, we’re going to check out the latest action regarding West Marine, Inc. (NASDAQ:WMAR).
How are hedge funds trading West Marine, Inc. (NASDAQ:WMAR)?
At the end of the third quarter, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -25% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings meaningfully (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 most valuable position in West Marine, Inc. (NASDAQ:WMAR), worth close to $17.2 million, accounting for 0.1% of its total 13F portfolio. The second largest stake is held by Select Equity Group, led by Robert Joseph Caruso, holding a $10.3 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism include Gilchrist Berg’s Water Street Capital, Jim Simons’ Renaissance Technologies and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Seeing as West Marine, Inc. (NASDAQ:WMAR) has witnessed falling interest from the entirety of the hedge funds we track, we can see that there is a sect of money managers that slashed their entire stakes in the third quarter. It’s worth mentioning that Ken Gray and Steve Walsh’s Bryn Mawr Capital sold off the biggest stake of the 700 funds followed by Insider Monkey, valued at about $0.4 million in stock, and Ken Grossman and Glen Schneider’s SG Capital Management was right behind this move, as the fund dropped about $0.1 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 2 funds in the third quarter.
Let’s check out hedge fund activity in other stocks similar to West Marine, Inc. (NASDAQ:WMAR). These stocks are CECO Environmental Corp. (NASDAQ:CECE), LeMaitre Vascular Inc (NASDAQ:LMAT), Lipocine Inc (NASDAQ:LPCN), and VSE Corporation (NASDAQ:VSEC). This group of stocks’ market valuations are similar to WMAR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CECE | 14 | 25582 | 7 |
| LMAT | 11 | 18603 | 1 |
| LPCN | 11 | 57213 | -1 |
| VSEC | 5 | 5343 | -1 |
As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $27 million. That figure was $30 million in WMAR’s case. CECO Environmental Corp. (NASDAQ:CECE) is the most popular stock in this table. On the other hand VSE Corporation (NASDAQ:VSEC) is the least popular one with only 5 bullish hedge fund positions. West Marine, Inc. (NASDAQ:WMAR) 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 CECE might be a better candidate to consider a long position.
