Is Littelfuse, Inc. (LFUS) Going to Burn These Hedge Funds?

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Tudor Investment Corp. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case with Littelfuse, Inc. (NASDAQ:LFUS) because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Sandler Capital Management).

Let’s now take a look at hedge fund activity in other stocks similar to Littelfuse, Inc. (NASDAQ:LFUS). These stocks are SLM Corp (NASDAQ:SLM), Columbia Property Trust Inc (NYSE:CXP), Worthington Industries, Inc. (NYSE:WOR), and Horizon Pharma Inc (NASDAQ:HZNP). This group of stocks’ market values resemble LFUS’s market value.

As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $287 million. That figure was $179 million in LFUS’s case. Horizon Pharma Inc (NASDAQ:HZNP) is the most popular stock in this table. On the other hand Columbia Property Trust Inc (NYSE:CXP) is the least popular one with only 11 bullish hedge fund positions. Littelfuse, Inc. (NASDAQ:LFUS) 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 HZNP might be a better candidate to consider taking a long position in.

Disclosure: none.