Is LogMeIn Inc (NASDAQ:LOGM) a good investment?
In the eyes of many investors, hedge funds are assumed to be overrated, outdated investment vehicles of a forgotten age. Although there are In excess of 8,000 hedge funds in operation in present day, this site aim at the leaders of this group, close to 525 funds. It is assumed that this group has its hands on the majority of the hedge fund industry's total assets, and by watching their highest performing stock picks, we've revealed a number of investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we've started sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 33 percentage points in 11 months (find the details here).
Just as crucial, optimistic insider trading activity is a second way to analyze the financial markets. There are a variety of motivations for a bullish insider to cut shares of his or her company, but just one, very obvious reason why they would buy. Many empirical studies have demonstrated the impressive potential of this tactic if shareholders understand where to look (learn more here).
Keeping this in mind, it's important to study the recent info about LogMeIn Inc (NASDAQ:LOGM).
In preparation for the third quarter, a total of 10 of the hedge funds we track held long positions in this stock, a change of -17% from the previous quarter. With the smart money's capital changing hands, there exists a select group of key hedge fund managers who were increasing their holdings substantially.
When using filings from the hedgies we track, Cadian Capital, managed by Eric Bannasch, holds the most valuable position in LogMeIn Inc (NASDAQ:LOGM). Cadian Capital has a $90.1 million position in the stock, comprising 2.8% of its 13F portfolio. Sitting at the No. 2 spot is Steven Cohen of SAC Capital Advisors, with a $44.6 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include D. E. Shaw's D E Shaw, Ryan Frick and Oliver Evans's Dorsal Capital Management and Christopher Zepf and Brian Thonn's Kingdom Ridge Capital.
Because LogMeIn Inc (NASDAQ:LOGM) has experienced bearish sentiment from the entirety of the hedge funds we track, it's easy to see that there were a few fund managers that slashed their full holdings in Q1. It's worth mentioning that Josh Resnick's Jericho Capital Asset Management cut the largest investment of the "upper crust" of funds we track, totaling an estimated $13.4 million in stock. Joseph A. Jolson's fund, Harvest Capital Strategies, also dumped its stock, about $4 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 2 funds in Q1.
Insider buying is at its handiest when the company we're looking at has experienced transactions within the past six months. Over the last 180-day time frame, LogMeIn Inc (NASDAQ:LOGM) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We'll also review the relationship between both of these indicators in other stocks similar to LogMeIn Inc (NASDAQ:LOGM). These stocks are NQ Mobile Inc (ADR) (NYSE:NQ), Incontact Inc (NASDAQ:SAAS), AutoNavi Holdings Ltd (ADR) (NASDAQ:AMAP), Responsys Inc (NASDAQ:MKTG), and E2open Inc (NASDAQ:EOPN). This group of stocks are in the application software industry and their market caps resemble LOGM's market cap.