At Insider Monkey, we pore over the filings of nearly 817 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not Lawson Products, Inc. (NASDAQ:LAWS) makes for a good investment right now.
Is Lawson Products (LAWS) a good stock to buy now? LAWS investors should pay attention to a decrease in hedge fund interest recently. Lawson Products, Inc. (NASDAQ:LAWS) was in 5 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 8. Our calculations also showed that LAWS 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In the eyes of most stock holders, hedge funds are perceived as worthless, outdated investment tools of yesteryear. While there are over 8000 funds trading at present, Our experts hone in on the bigwigs of this club, around 850 funds. These money managers handle most of all hedge funds’ total asset base, and by watching their inimitable equity investments, Insider Monkey has revealed numerous investment strategies that have historically exceeded Mr. Market. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
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 15 best blue chip stocks 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now we’re going to review the latest hedge fund action encompassing Lawson Products, Inc. (NASDAQ:LAWS).
How have hedgies been trading Lawson Products, Inc. (NASDAQ:LAWS)?
At Q3’s end, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -29% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards LAWS over the last 21 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Royce & Associates was the largest shareholder of Lawson Products, Inc. (NASDAQ:LAWS), with a stake worth $13.6 million reported as of the end of September. Trailing Royce & Associates was GAMCO Investors, which amassed a stake valued at $7.8 million. Renaissance Technologies, Winton Capital Management, and Two Sigma Advisors were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Royce & Associates allocated the biggest weight to Lawson Products, Inc. (NASDAQ:LAWS), around 0.15% of its 13F portfolio. GAMCO Investors is also relatively very bullish on the stock, earmarking 0.09 percent of its 13F equity portfolio to LAWS.
Because Lawson Products, Inc. (NASDAQ:LAWS) has faced falling interest from hedge fund managers, it’s safe to say that there exists a select few funds that elected to cut their full holdings last quarter. It’s worth mentioning that Israel Englander’s Millennium Management sold off the biggest stake of the 750 funds followed by Insider Monkey, valued at about $0.4 million in stock. Gavin Saitowitz and Cisco J. del Valle’s fund, Springbok Capital, also cut its stock, about $0 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 2 funds last quarter.
Let’s go over hedge fund activity in other stocks similar to Lawson Products, Inc. (NASDAQ:LAWS). These stocks are Corvus Gold Inc. (NASDAQ:KOR), Amerant Bancorp Inc. (NASDAQ:AMTB), MTS Systems Corporation (NASDAQ:MTSC), Cambridge Bancorp (NASDAQ:CATC), RedHill Biopharma Ltd (NASDAQ:RDHL), PolyMet Mining Corp. (NYSE:PLM), and Kimbell Royalty Partners (NYSE:KRP). All of these stocks’ market caps are similar to LAWS’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
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 $32 million. That figure was $26 million in LAWS’s case. MTS Systems Corporation (NASDAQ:MTSC) is the most popular stock in this table. On the other hand Amerant Bancorp Inc. (NASDAQ:AMTB) is the least popular one with only 2 bullish hedge fund positions. Lawson Products, Inc. (NASDAQ:LAWS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for LAWS is 34.3. 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. 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 still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on LAWS as the stock returned 18.7% since the end of the third quarter (through 11/27) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.