Legendary investors such as Jeffrey Talpins and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don't publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That's why we analyze the activity of those elite funds in these small-cap stocks. In the following paragraphs, we analyze Luminex Corporation (NASDAQ:LMNX) from the perspective of those elite funds.
Luminex Corporation (NASDAQ:LMNX) investors should be aware of an increase in enthusiasm from smart money of late. Our calculations also showed that lmnx isn't among the 30 most popular stocks among hedge funds.
According to most investors, hedge funds are assumed to be worthless, old financial tools of years past. While there are greater than 8000 funds with their doors open at present, Our researchers hone in on the crème de la crème of this club, around 750 funds. It is estimated that this group of investors orchestrate the lion's share of all hedge funds' total asset base, and by monitoring their finest stock picks, Insider Monkey has unsheathed a few investment strategies that have historically surpassed the market. Insider Monkey's flagship hedge fund strategy outstripped the S&P 500 index by nearly 5 percentage points a year since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 27.5% since February 2017 (through March 12th) even though the market was up nearly 25% during the same period. We just shared a list of 6 short targets in our latest quarterly update and they are already down an average of 6% in less than a month.
We're going to analyze the new hedge fund action surrounding Luminex Corporation (NASDAQ:LMNX).
What does the smart money think about Luminex Corporation (NASDAQ:LMNX)?
At the end of the fourth quarter, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 19% from the previous quarter. The graph below displays the number of hedge funds with bullish position in LMNX over the last 14 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
More specifically, Consonance Capital Management was the largest shareholder of Luminex Corporation (NASDAQ:LMNX), with a stake worth $55.5 million reported as of the end of December. Trailing Consonance Capital Management was Renaissance Technologies, which amassed a stake valued at $51.1 million. RGM Capital, Millennium Management, and Citadel Investment Group were also very fond of the stock, giving the stock large weights in their portfolios.
With a general bullishness amongst the heavyweights, key money managers were leading the bulls' herd. HBK Investments, managed by David Costen Haley, established the most valuable position in Luminex Corporation (NASDAQ:LMNX). HBK Investments had $0.3 million invested in the company at the end of the quarter. Minhua Zhang's Weld Capital Management also initiated a $0.2 million position during the quarter. The other funds with brand new LMNX positions are Paul Marshall and Ian Wace's Marshall Wace LLP and Gavin Saitowitz and Cisco J. del Valle's Springbok Capital.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Luminex Corporation (NASDAQ:LMNX) but similarly valued. We will take a look at Celestica Inc. (NYSE:CLS), Electro Scientific Industries, Inc. (NASDAQ:ESIO), TriCo Bancshares (NASDAQ:TCBK), and LGI Homes Inc (NASDAQ:LGIH). This group of stocks' market caps match LMNX's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CLS,14,100130,-3 ESIO,17,197164,4 TCBK,10,38939,-1 LGIH,12,68829,0 Average,13.25,101266,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.25 hedge funds with bullish positions and the average amount invested in these stocks was $101 million. That figure was $175 million in LMNX's case. Electro Scientific Industries, Inc. (NASDAQ:ESIO) is the most popular stock in this table. On the other hand TriCo Bancshares (NASDAQ:TCBK) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Luminex Corporation (NASDAQ:LMNX) is more popular among hedge funds. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately LMNX wasn't nearly as popular as these 15 stock and hedge funds that were betting on LMNX were disappointed as the stock returned -5% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.