Does Lombard Medical Inc (EVAR) Represent A Good Investment?

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Lombard Medical Inc (NASDAQ:EVAR).

Lombard Medical Inc (NASDAQ:EVAR) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 4 hedge funds’ portfolios at the end of September. At the end of this article we will also compare EVAR to other stocks including Xplore Technologies Corp. (NASDAQ:XPLR), Aldeyra Therapeutics Inc (NASDAQ:ALDX), and Amtech Systems, Inc. (NASDAQ:ASYS) to get a better sense of its popularity.

If you’d ask most investors, hedge funds are assumed to be worthless, old financial vehicles of the past. While there are over 8000 funds with their doors open at present, We look at the crème de la crème of this club, around 700 funds. Most estimates calculate that this group of people watch over most of the smart money’s total asset base, and by observing their matchless picks, Insider Monkey has determined many investment strategies that have historically outpaced the market. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points annually for a decade in their back tests.

Keeping this in mind, we’re going to take a gander at the fresh action regarding Lombard Medical Inc (NASDAQ:EVAR).

What have hedge funds been doing with Lombard Medical Inc (NASDAQ:EVAR)?

At the end of the third quarter, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the second quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Dennis Purcell’s Aisling Capital has the largest position in Lombard Medical Inc (NASDAQ:EVAR), worth close to $3.2 million, corresponding to 0.6% of its total 13F portfolio. Sitting at the No. 2 spot is Anand Parekh of Alyeska Investment Group, with a $0.6 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining professional money managers that are bullish include Ken Griffin’s Citadel Investment Group, and Efrem Kamen’s Pura Vida Investment.

Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.

Let’s also examine hedge fund activity in other stocks similar to Lombard Medical Inc (NASDAQ:EVAR). These stocks are Xplore Technologies Corp. (NASDAQ:XPLR), Aldeyra Therapeutics Inc (NASDAQ:ALDX), Amtech Systems, Inc. (NASDAQ:ASYS), and Comstock Mining, Inc. (NYSEAMEX:LODE). All of these stocks’ market caps resemble EVAR’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
XPLR 4 2768 0
ALDX 7 13025 0
ASYS 4 9742 0
LODE 4 3173 -1

As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $7 million. That figure was $5 million in EVAR’s case. Aldeyra Therapeutics Inc (NASDAQ:ALDX) is the most popular stock in this table. On the other hand, Xplore Technologies Corp. (NASDAQ:XPLR) and Amtech Systems, Inc. (NASDAQ:ASYS) are the least popular stocks in this table. With only 4 bullish hedge fund positions, Lombard Medical Inc (NASDAQ:EVAR) has the same popularity as the least popular stocks in this group. Considering that hedge funds aren’t fond of this stock it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.