Do Hedge Funds Love The LGL Group, Inc. (LGL)?

After several tireless days we have finished crunching the numbers from nearly 817 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards The LGL Group, Inc. (NYSE:LGL).

The LGL Group, Inc. (NYSE:LGL) was in 4 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 5. LGL investors should be aware of a decrease in hedge fund interest recently. There were 5 hedge funds in our database with LGL holdings at the end of June. Our calculations also showed that LGL isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

In the financial world there are a large number of gauges stock market investors put to use to size up their stock investments. A pair of the most innovative gauges are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the top picks of the best investment managers can trounce the market by a significant margin (see the details here).

Gavin Saitowitz of Prelude Capital

Gavin Saitowitz of Prelude Capital

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now we’re going to check out the new hedge fund action surrounding The LGL Group, Inc. (NYSE:LGL).

How have hedgies been trading The LGL Group, Inc. (NYSE:LGL)?

At the end of September, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of -20% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards LGL over the last 21 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, GAMCO Investors, managed by Mario Gabelli, holds the number one position in The LGL Group, Inc. (NYSE:LGL). GAMCO Investors has a $4.8 million position in the stock, comprising 0.1% of its 13F portfolio. On GAMCO Investors’s heels is Renaissance Technologies, which holds a $2.9 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining members of the smart money with similar optimism contain David P. Cohen’s Minerva Advisors, Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital and . In terms of the portfolio weights assigned to each position Minerva Advisors allocated the biggest weight to The LGL Group, Inc. (NYSE:LGL), around 0.08% of its 13F portfolio. GAMCO Investors is also relatively very bullish on the stock, earmarking 0.05 percent of its 13F equity portfolio to LGL.

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Bailard Inc. 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 in this case because none of the 750+ hedge funds tracked by Insider Monkey identified LGL as a viable investment and initiated a position in the stock.

Let’s now review hedge fund activity in other stocks similar to The LGL Group, Inc. (NYSE:LGL). We will take a look at CBM Bancorp, Inc. (NASDAQ:CBMB), MIND C.T.I. Ltd. (NASDAQ:MNDO), Ring Energy Inc (NYSE:REI), Perma-Pipe International Holdings, Inc. (NASDAQ:PPIH), Delcath Systems, Inc. (NASDAQ:DCTH), Espey Manufacturing & Electronics Corp. (NYSE:ESP), and Strata Skin Sciences, Inc. (NASDAQ:SSKN). All of these stocks’ market caps are similar to LGL’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CBMB 3 1015 0
MNDO 1 152 0
REI 7 1621 -2
PPIH 2 3347 0
DCTH 2 1333 -1
ESP 1 2410 0
SSKN 3 9578 0
Average 2.7 2779 -0.4

View table here if you experience formatting issues.

As you can see these stocks had an average of 2.7 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $8 million in LGL’s case. Ring Energy Inc (NYSE:REI) is the most popular stock in this table. On the other hand MIND C.T.I. Ltd. (NASDAQ:MNDO) is the least popular one with only 1 bullish hedge fund positions. The LGL Group, Inc. (NYSE:LGL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for LGL is 53. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th and beat the market again by 16.1 percentage points. Unfortunately LGL wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on LGL were disappointed as the stock returned 8.2% since the end of September (through 11/27) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.

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Disclosure: None. This article was originally published at Insider Monkey.