Here is What Hedge Funds Think About Lifelock Inc (LOCK)

Most investors tend to think that hedge funds and other asset managers are worthless, as they cannot beat even simple index fund portfolios. In fact, most people expect hedge funds to compete with and outperform the bull market that we have witnessed over the past few years. However, hedge funds are generally partially hedged and aim at delivering attractive risk-adjusted returns rather than following the ups and downs of equity markets hoping that they will outperform the broader market. Our research shows that hedge funds do have great stock picking skills, so let’s take a glance at the smart money sentiment towards Lifelock Inc (NYSE:LOCK).

Lifelock Inc (NYSE:LOCK) has seen an increase in activity from the world’s largest hedge funds in recent months. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as ImmunoGen, Inc. (NASDAQ:IMGN), Greenhill & Co., Inc. (NYSE:GHL), and Hibbett Sports, Inc. (NASDAQ:HIBB) to gather more data points.

Keeping this in mind, we’re going to take a look at the key action encompassing Lifelock Inc (NYSE:LOCK).

What does the smart money think about Lifelock Inc (NYSE:LOCK)?

At the end of the third quarter, a total of 25 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 9% from one quarter earlier. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Okumus Fund Management, managed by Ahmet Okumus, holds the biggest position in Lifelock Inc (NYSE:LOCK). Okumus Fund Management has an $77.4 million position in the stock, comprising 10.1% of its 13F portfolio. Sitting at the No. 2 spot is Baupost Group, managed by Seth Klarman, which holds an $39.1 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism encompass Alok Agrawal’s Bloom Tree Partners, Sahm Adrangi’s Kerrisdale Capital and Seymour Sy Kaufman and Michael Stark’s Crosslink Capital.

With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Baupost Group, managed by Seth Klarman, assembled the most outsized position in Lifelock Inc (NYSE:LOCK). Baupost Group had $39.1 million invested in the company at the end of the quarter. Alok Agrawal’s Bloom Tree Partners also initiated a $20.4 million position during the quarter. The other funds with brand new LOCK positions are Sahm Adrangi’s Kerrisdale Capital, Charles Paquelet’s Skylands Capital, and Steve Cohen’s Point72 Asset Management.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Lifelock Inc (NYSE:LOCK) but similarly valued. These stocks are ImmunoGen, Inc. (NASDAQ:IMGN), Greenhill & Co., Inc. (NYSE:GHL), Hibbett Sports, Inc. (NASDAQ:HIBB), and Endologix, Inc. (NASDAQ:ELGX). This group of stocks’ market valuations are closest to LOCK’s market valuation.

As you can see these stocks had an average of 15.25 hedge funds with bullish positions and the average amount invested in these stocks was $97 million. That figure was $193 million in LOCK’s case. Endologix, Inc. (NASDAQ:ELGX) is the most popular stock in this table. On the other hand Hibbett Sports, Inc. (NASDAQ:HIBB) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Lifelock Inc (NYSE:LOCK) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.