Hedge Funds Are Selling L-3 Communications Holdings, Inc. (LLL)

Since L-3 Communications Holdings, Inc. (NYSE:LLL) has experienced a declination in interest from the aggregate hedge fund industry, it’s safe to say that there was a specific group of hedge funds that slashed their positions entirely in the third quarter. Interestingly, Jim Simons’s Renaissance Technologies dropped the biggest stake of the “upper crust” of funds followed by Insider Monkey, worth an estimated $33.8 million in stock. Joel Greenblatt’s fund, Gotham Asset Management, also dropped its stock, about $26.1 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 4 funds in the third quarter.

Let’s now take a look at hedge fund activity in other stocks similar to L-3 Communications Holdings, Inc. (NYSE:LLL). We will take a look at Total System Services, Inc. (NYSE:TSS), Lear Corporation (NYSE:LEA), International Flavors & Fragrances Inc (NYSE:IFF), and J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT). This group of stocks’ market values match LLL’s market value.

As you can see these stocks had an average of 28.25 hedge funds with bullish positions and the average amount invested in these stocks was $412 million. That figure was $227 million in LLL’s case. Lear Corporation (NYSE:LEA) is the most popular stock in this table. On the other hand International Flavors & Fragrances Inc (NYSE:IFF) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks L-3 Communications Holdings, Inc. (NYSE:LLL) is as less popular as IFF. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, 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.