Is Landauer, Inc. (LDR) A Good Stock to Buy?

You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.

Landauer, Inc. (NYSE:LDR) was in 8 hedge funds’ portfolios at the end of September. LDR investors should be aware of an increase in activity from the world’s largest hedge funds lately. There were 6 hedge funds in our database with LDR holdings at the end of June. At the end of this article we will also compare LDR to other stocks including Advaxis, Inc. (NASDAQ:ADXS), China Yuchai International Limited (NYSE:CYD), and Resolute Forest Products Inc (NYSE:RFP) to get a better sense of its popularity.

We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.

What does the smart money think about Landauer, Inc. (NYSE:LDR)?

At Q3’s end, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 33% rise from the second quarter of 2016. The graph below displays the number of hedge funds with bullish positions in LDR over the last 5 quarters, which has hit its yearly high as of September 30. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Chuck Royce’s Royce & Associates has the most valuable position in Landauer, Inc. (NYSE:LDR), worth close to $47.8 million. The second largest stake is held by Renaissance Technologies, one of the largest hedge funds in the world, holding an $8.3 million position. Some other peers that hold long positions consist of Mario Gabelli’s GAMCO Investors, Israel Englander’s Millennium Management, and David E. Shaw’s D E Shaw. 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-micro-cap stocks.

With general bullishness amongst the heavyweights, key money managers have been driving this optimism. Millennium Management initiated the largest position in Landauer, Inc. (NYSE:LDR). Millennium Management had $1.4 million invested in the company at the end of the quarter. Joshua Packwood and Schuster Tanger’s Radix Partners also initiated a $0.4 million position during the quarter. The only other fund with a brand new LDR position was John Overdeck and David Siegel’s Two Sigma Advisors.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Landauer, Inc. (NYSE:LDR) but similarly valued. These stocks are Advaxis, Inc. (NASDAQ:ADXS), China Yuchai International Limited (NYSE:CYD), Resolute Forest Products Inc (NYSE:RFP), and Textainer Group Holdings Limited (NYSE:TGH). This group of stocks’ market values match LDR’s market value.

As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $92 million. That figure was $62 million in LDR’s case. Resolute Forest Products Inc (NYSE:RFP) is the most popular stock in this table. On the other hand China Yuchai International Limited (NYSE:CYD) is the least popular one with only 6 bullish hedge fund positions. Landauer, Inc. (NYSE:LDR) 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 RFP might be a better candidate to consider taking a long position in.

Disclosure: None