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Hedge Funds Cautiously Watching LightPath Technologies, Inc. (LPTH)

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of LightPath Technologies, Inc. (NASDAQ:LPTH).

LightPath Technologies, Inc. (NASDAQ:LPTH) has seen an increase in hedge fund sentiment in recent months. Our calculations also showed that LPTH isn’t among the 30 most popular stocks among hedge funds (click for Q1 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 tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 87% since March 2017 and outperformed the S&P 500 ETFs by more than 51 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Chuck Royce

Chuck Royce of Royce & Associates

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s take a peek at the fresh hedge fund action regarding LightPath Technologies, Inc. (NASDAQ:LPTH).

What does smart money think about LightPath Technologies, Inc. (NASDAQ:LPTH)?

Heading into the second quarter of 2020, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 100% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards LPTH over the last 18 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is LPTH A Good Stock To Buy?

According to Insider Monkey’s hedge fund database, Chuck Royce’s Royce & Associates has the biggest position in LightPath Technologies, Inc. (NASDAQ:LPTH), worth close to $1.8 million, amounting to less than 0.1%% of its total 13F portfolio. On Royce & Associates’s heels is Renaissance Technologies, with a $0.4 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that hold long positions encompass Ken Grossman and Glen Schneider’s SG Capital Management, Ken Griffin’s Citadel Investment Group and . In terms of the portfolio weights assigned to each position SG Capital Management allocated the biggest weight to LightPath Technologies, Inc. (NASDAQ:LPTH), around 0.09% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, setting aside 0.02 percent of its 13F equity portfolio to LPTH.

As industrywide interest jumped, some big names have been driving this bullishness. SG Capital Management, managed by Ken Grossman and Glen Schneider, created the most outsized position in LightPath Technologies, Inc. (NASDAQ:LPTH). SG Capital Management had $0.2 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0 million investment in the stock during the quarter.

Let’s check out hedge fund activity in other stocks similar to LightPath Technologies, Inc. (NASDAQ:LPTH). We will take a look at Hudson Technologies, Inc. (NASDAQ:HDSN), inTEST Corporation (NASDAQ:INTT), Tuesday Morning Corporation (NASDAQ:TUES), and MV Oil Trust (NYSE:MVO). This group of stocks’ market caps are closest to LPTH’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HDSN 3 315 -1
INTT 5 5695 1
TUES 4 1259 -3
MVO 1 160 0
Average 3.25 1857 -0.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 3.25 hedge funds with bullish positions and the average amount invested in these stocks was $2 million. That figure was $2 million in LPTH’s case. inTEST Corporation (NASDAQ:INTT) is the most popular stock in this table. On the other hand MV Oil Trust (NYSE:MVO) is the least popular one with only 1 bullish hedge fund positions. LightPath Technologies, Inc. (NASDAQ:LPTH) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but still beat the market by 13.2 percentage points. Hedge funds were also right about betting on LPTH as the stock returned 116.8% in Q2 (through the end of May) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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