Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the second quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of Littelfuse, Inc. (NASDAQ:LFUS) based on that data and determine whether they were really smart about the stock.
Littelfuse, Inc. (NASDAQ:LFUS) investors should pay attention to an increase in support from the world's most elite money managers in recent months. Littelfuse, Inc. (NASDAQ:LFUS) was in 24 hedge funds' portfolios at the end of June. The all time high for this statistics is 22. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that LFUS isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.
If you'd ask most market participants, hedge funds are seen as slow, old financial tools of the past. While there are greater than 8000 funds with their doors open today, We look at the moguls of this group, around 850 funds. These investment experts administer bulk of all hedge funds' total capital, and by shadowing their finest investments, Insider Monkey has revealed numerous investment strategies that have historically exceeded Mr. Market. Insider Monkey's flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 34% since February 2017 (through August 17th) even though the market was up 53% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Ken Fisher of Fisher Asset Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website to get excerpts of these letters in your inbox. Keeping this in mind we're going to take a look at the key hedge fund action surrounding Littelfuse, Inc. (NASDAQ:LFUS).
How have hedgies been trading Littelfuse, Inc. (NASDAQ:LFUS)?
Heading into the third quarter of 2020, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 9% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards LFUS over the last 20 quarters. With hedge funds' capital changing hands, there exists a few notable hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Ian Simm's Impax Asset Management has the most valuable position in Littelfuse, Inc. (NASDAQ:LFUS), worth close to $103.7 million, amounting to 1.1% of its total 13F portfolio. On Impax Asset Management's heels is Ariel Investments, led by John W. Rogers, holding a $68.6 million position; the fund has 1% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that are bullish contain Ken Fisher's Fisher Asset Management, Principal Global Investors's Columbus Circle Investors and Chuck Royce's Royce & Associates. In terms of the portfolio weights assigned to each position Ayrshire Capital Management allocated the biggest weight to Littelfuse, Inc. (NASDAQ:LFUS), around 1.68% of its 13F portfolio. Provenire Capital is also relatively very bullish on the stock, designating 1.32 percent of its 13F equity portfolio to LFUS.
As industrywide interest jumped, specific money managers were breaking ground themselves. Columbus Circle Investors, managed by Principal Global Investors, established the most valuable position in Littelfuse, Inc. (NASDAQ:LFUS). Columbus Circle Investors had $18.5 million invested in the company at the end of the quarter. Anthony S. Daffer's Provenire Capital also made a $1.4 million investment in the stock during the quarter. The following funds were also among the new LFUS investors: Israel Englander's Millennium Management, Lee Ainslie's Maverick Capital, and Mika Toikka's AlphaCrest Capital Management.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Littelfuse, Inc. (NASDAQ:LFUS) but similarly valued. We will take a look at MorphoSys AG (NASDAQ:MOR), LogMeIn Inc (NASDAQ:LOGM), Redfin Corporation (NASDAQ:RDFN), New Relic Inc (NYSE:NEWR), Nektar Therapeutics (NASDAQ:NKTR), First Citizens BancShares Inc. (NASDAQ:FCNCA), and Wingstop Inc (NASDAQ:WING). All of these stocks' market caps are similar to LFUS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MOR,6,12533,1 LOGM,31,785090,3 RDFN,26,203341,6 NEWR,35,1206690,4 NKTR,26,269126,9 FCNCA,15,112679,-2 WING,28,311031,1 Average,23.9,414356,3.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.9 hedge funds with bullish positions and the average amount invested in these stocks was $414 million. That figure was $317 million in LFUS's case. New Relic Inc (NYSE:NEWR) is the most popular stock in this table. On the other hand MorphoSys AG (NASDAQ:MOR) is the least popular one with only 6 bullish hedge fund positions. Littelfuse, Inc. (NASDAQ:LFUS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for LFUS is 68. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 21.3% in 2020 through September 25th and beat the market by 17.7 percentage points. Unfortunately LFUS wasn't nearly as popular as these 10 stocks and hedge funds that were betting on LFUS were disappointed as the stock returned -0.4% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.