Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Linx S.A. (NYSE:LINX).
Is Linx S.A. (NYSE:LINX) a good stock to buy now? Hedge funds were turning bullish. The number of bullish hedge fund bets improved by 2 in recent months. Linx S.A. (NYSE:LINX) was in 5 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 14. Our calculations also showed that LINX 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). There were 3 hedge funds in our database with LINX positions at the end of the second quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a lot of gauges market participants put to use to analyze publicly traded companies. Some of the best gauges are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the top picks of the top fund managers can outclass the broader indices by a healthy amount (see the details here).
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 recent hedge fund action encompassing Linx S.A. (NYSE:LINX).
How are hedge funds trading Linx S.A. (NYSE:LINX)?
At the end of the third quarter, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 67% from the second quarter of 2020. On the other hand, there were a total of 5 hedge funds with a bullish position in LINX a year ago. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Tiger Global Management LLC, managed by Chase Coleman, holds the largest position in Linx S.A. (NYSE:LINX). Tiger Global Management LLC has a $20.6 million position in the stock, comprising 0.1% of its 13F portfolio. The second most bullish fund manager is Israel Englander of Millennium Management, with a $10.3 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining professional money managers that hold long positions include Crispin Odey’s Odey Asset Management Group, Karim Abbadi and Edward McBride’s Centiva Capital and Julian Robertson’s Tiger Management. In terms of the portfolio weights assigned to each position Odey Asset Management Group allocated the biggest weight to Linx S.A. (NYSE:LINX), around 0.32% of its 13F portfolio. Tiger Global Management LLC is also relatively very bullish on the stock, designating 0.06 percent of its 13F equity portfolio to LINX.
Now, key money managers were leading the bulls’ herd. Millennium Management, managed by Israel Englander, assembled the biggest position in Linx S.A. (NYSE:LINX). Millennium Management had $10.3 million invested in the company at the end of the quarter. Crispin Odey’s Odey Asset Management Group also made a $2.4 million investment in the stock during the quarter. The other funds with brand new LINX positions are Karim Abbadi and Edward McBride’s Centiva Capital and Julian Robertson’s Tiger Management.
Let’s now take a look at hedge fund activity in other stocks similar to Linx S.A. (NYSE:LINX). These stocks are Kaman Corporation (NYSE:KAMN), NextPoint Residential Trust Inc (NYSE:NXRT), Deluxe Corporation (NYSE:DLX), Atkore International Group Inc. (NYSE:ATKR), Karyopharm Therapeutics Inc (NASDAQ:KPTI), PC Connection, Inc. (NASDAQ:CNXN), and Micro Focus Intl PLC (NYSE:MFGP). All of these stocks’ market caps match LINX’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 13.3 hedge funds with bullish positions and the average amount invested in these stocks was $102 million. That figure was $34 million in LINX’s case. Karyopharm Therapeutics Inc (NASDAQ:KPTI) is the most popular stock in this table. On the other hand PC Connection, Inc. (NASDAQ:CNXN) is the least popular one with only 4 bullish hedge fund positions. Linx S.A. (NYSE:LINX) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for LINX is 20.7. 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 LINX as the stock returned 10.1% 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.