Here is What Hedge Funds Think About FLIR Systems, Inc. (FLIR)

The worries about the election and the ongoing uncertainty about the path of interest-rate increases have been keeping investors on the sidelines. Of course, most hedge funds and other asset managers have been underperforming main stock market indices since the middle of 2015. Interestingly though, smaller-cap stocks registered their best performance relative to the large-capitalization stocks since the end of the June quarter, suggesting that this may be the best time to take a cue from their stock picks. In fact, the Russell 2000 Index gained more than 15% since the beginning of the third quarter, while the Standard and Poor’s 500 benchmark returned less than 6%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards FLIR Systems, Inc. (NASDAQ:FLIR).

Is FLIR Systems, Inc. (NASDAQ:FLIR) a healthy stock for your portfolio? Hedge funds are undeniably in an optimistic mood. The number of bullish hedge fund bets that are revealed through the 13F filings went up by 5 lately. 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 First American Financial Corp (NYSE:FAF), Boardwalk Pipeline Partners, LP (NYSE:BWP), and ICON plc – Ordinary Shares (NASDAQ:ICLR) to gather more data points.

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.

Hedge fund activity in FLIR Systems, Inc. (NASDAQ:FLIR)

At Q3’s end, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 29% jump from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards FLIR over the last 5 quarters, which shows a sharp decline in Q4 2015. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey’s hedge fund database, D E Shaw, founded by David E. Shaw, holds the number one position in FLIR Systems, Inc. (NASDAQ:FLIR). D E Shaw has a $50.7 million position in the stock. The second most bullish fund manager is Chuck Royce of Royce & Associates, with a $47.8 million position. Other members of the smart money with similar optimism include Wallace Weitz’s Wallace R. Weitz & Co., Jim Simons’ Renaissance Technologies, and Anand Parekh’s Alyeska Investment Group. 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 aggregate interest increased, key hedge funds have jumped into FLIR Systems, Inc. (NASDAQ:FLIR) headfirst. Marshall Wace LLP, led by Paul Marshall and Ian Wace, created the most outsized position in FLIR Systems, Inc. (NASDAQ:FLIR). Marshall Wace LLP had $7.3 million invested in the company at the end of the quarter. Benjamin A. Smith’s Laurion Capital Management also made a $7.2 million investment in the stock during the quarter. The following funds were also among the new FLIR investors: Matthew Tewksbury’s Stevens Capital Management, David Costen Haley’s HBK Investments, and George Hall’s Clinton Group.

Let’s check out hedge fund activity in other stocks similar to FLIR Systems, Inc. (NASDAQ:FLIR). We will take a look at First American Financial Corp (NYSE:FAF), Boardwalk Pipeline Partners, LP (NYSE:BWP), ICON plc – Ordinary Shares (NASDAQ:ICLR), and Euronet Worldwide, Inc. (NASDAQ:EEFT). All of these stocks’ market caps are similar to FLIR’s market cap.

As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $271 million. That figure was $253 million in FLIR’s case. First American Financial Corp (NYSE:FAF) is the most popular stock in this table. On the other hand Boardwalk Pipeline Partners, LP (NYSE:BWP) is the least popular one with only 18 bullish hedge fund positions. FLIR Systems, Inc. (NASDAQ:FLIR) 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 FAF might be a better candidate to consider taking a long position in.

Disclosure: None