Is Lear Corporation (LEA) A Good Stock To Buy?

Seeing as Lear Corporation (NYSE:LEA) has experienced declining sentiment from the entirety of the hedge funds we track, it’s easy to see that there exists a select few funds that slashed their full holdings in the third quarter. Intriguingly, Malcolm Fairbairn’s Ascend Capital said goodbye to the biggest position of all the hedgies tracked by Insider Monkey, worth an estimated $2.7 million in stock, and Steve Cohen’s Point72 Asset Management was right behind this move, as the fund cut about $2.5 million worth of shares. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 3 funds in the third quarter.

Let’s go over hedge fund activity in other stocks similar to Lear Corporation (NYSE:LEA). These stocks are Teck Resources Ltd (USA) (NYSE:TCK), Torchmark Corporation (NYSE:TMK), National Retail Properties, Inc. (NYSE:NNN), and Msci Inc (NYSE:MSCI). This group of stocks’ market valuations resemble LEA’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TCK 33 834251 6
TMK 19 614374 -1
NNN 20 103292 1
MSCI 24 349907 1

As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $475 million. That figure was $709 million in LEA’s case. Teck Resources Ltd (USA) (NYSE:TCK) is the most popular stock in this table. On the other hand Torchmark Corporation (NYSE:TMK) is the least popular one with only 19 bullish hedge fund positions. Lear Corporation (NYSE:LEA) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard TCK might be a better candidate to consider a long position in, with a positive influx of six hedge funds in Q3.

Disclosure: None