Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 817 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Lifetime Brands Inc (NASDAQ:LCUT) in this article.
Is Lifetime Brands (LCUT) a good stock to buy? Investors who are in the know were taking a bullish view. The number of long hedge fund positions inched up by 3 lately. Lifetime Brands Inc (NASDAQ:LCUT) was in 5 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 5. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that LCUT 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
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. Keeping this in mind let’s take a gander at the new hedge fund action encompassing Lifetime Brands Inc (NASDAQ:LCUT).
How have hedgies been trading Lifetime Brands Inc (NASDAQ:LCUT)?
At third quarter’s end, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 150% from the previous quarter. By comparison, 3 hedge funds held shares or bullish call options in LCUT a year ago. So, let’s find out 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 Lifetime Brands Inc (NASDAQ:LCUT), with a stake worth $1.1 million reported as of the end of September. Trailing Royce & Associates was Renaissance Technologies, which amassed a stake valued at $0.6 million. Millennium Management, Engineers Gate Manager, and Prelude Capital (previously Springbok Capital) 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 Lifetime Brands Inc (NASDAQ:LCUT), around 0.01% of its 13F portfolio. Engineers Gate Manager is also relatively very bullish on the stock, setting aside 0.01 percent of its 13F equity portfolio to LCUT.
Consequently, key money managers were leading the bulls’ herd. Millennium Management, managed by Israel Englander, established the biggest position in Lifetime Brands Inc (NASDAQ:LCUT). Millennium Management had $0.3 million invested in the company at the end of the quarter. Greg Eisner’s Engineers Gate Manager also initiated a $0.1 million position during the quarter. The only other fund with a new position in the stock is Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (previously Springbok Capital).
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Lifetime Brands Inc (NASDAQ:LCUT) but similarly valued. These stocks are Gamida Cell Ltd. (NASDAQ:GMDA), Verastem Inc (NASDAQ:VSTM), Mastech Digital, Inc. (NYSE:MHH), Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB), Organigram Holdings Inc. (NASDAQ:OGI), Vera Bradley, Inc. (NASDAQ:VRA), and Misonix, Inc. (NASDAQ:MSON). This group of stocks’ market valuations are closest to LCUT’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 9.4 hedge funds with bullish positions and the average amount invested in these stocks was $20 million. That figure was $2 million in LCUT’s case. Vera Bradley, Inc. (NASDAQ:VRA) is the most popular stock in this table. On the other hand Mastech Digital, Inc. (NYSE:MHH) is the least popular one with only 4 bullish hedge fund positions. Lifetime Brands Inc (NASDAQ:LCUT) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for LCUT is 41.8. 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 LCUT as the stock returned 43.2% 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.