Is LMAT A Good Stock To Buy Now?

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 LeMaitre Vascular Inc (NASDAQ:LMAT) in this article.

Is LMAT a good stock to buy now? LeMaitre Vascular Inc (NASDAQ:LMAT) has seen a decrease in activity from the world’s largest hedge funds in recent months. LeMaitre Vascular Inc (NASDAQ:LMAT) was in 7 hedge funds’ portfolios at the end of September. The all time high for this statistics is 12. There were 9 hedge funds in our database with LMAT holdings at the end of June. Our calculations also showed that LMAT 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.


Cliff Asness of AQR Capital Management

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 5 best cheap stocks to buy according to Ray Dalio to identify stocks with upside potential. 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 peek at the new hedge fund action encompassing LeMaitre Vascular Inc (NASDAQ:LMAT).

What have hedge funds been doing with LeMaitre Vascular Inc (NASDAQ:LMAT)?

At Q3’s end, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -22% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in LMAT over the last 21 quarters. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).

More specifically, Millennium Management was the largest shareholder of LeMaitre Vascular Inc (NASDAQ:LMAT), with a stake worth $1.3 million reported as of the end of September. Trailing Millennium Management was Marshall Wace LLP, which amassed a stake valued at $1.2 million. Citadel Investment Group, Royce & Associates, and AQR Capital Management 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 PDT Partners allocated the biggest weight to LeMaitre Vascular Inc (NASDAQ:LMAT), around 0.02% of its 13F portfolio. Engineers Gate Manager is also relatively very bullish on the stock, designating 0.01 percent of its 13F equity portfolio to LMAT.

Due to the fact that LeMaitre Vascular Inc (NASDAQ:LMAT) has experienced a decline in interest from the aggregate hedge fund industry, we can see that there were a few money managers that decided to sell off their full holdings in the third quarter. Interestingly, Renaissance Technologies cut the largest position of the “upper crust” of funds monitored by Insider Monkey, valued at about $0.8 million in stock. Roger Ibbotson’s fund, Zebra Capital Management, also dumped its stock, about $0.2 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 2 funds in the third quarter.

Let’s now review hedge fund activity in other stocks similar to LeMaitre Vascular Inc (NASDAQ:LMAT). We will take a look at Argan, Inc. (NYSE:AGX), BJ’s Restaurants, Inc. (NASDAQ:BJRI), Photronics, Inc. (NASDAQ:PLAB), American Axle & Manufacturing Holdings, Inc. (NYSE:AXL), Nexgen Energy Ltd. (NYSE:NXE), Scorpio Tankers Inc. (NYSE:STNG), and TPG RE Finance Trust, Inc. (NYSE:TRTX). This group of stocks’ market caps resemble LMAT’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AGX 13 61268 2
BJRI 14 43978 2
PLAB 20 74020 -1
AXL 22 59546 2
NXE 6 28476 -1
STNG 14 30314 -4
TRTX 13 74230 -1
Average 14.6 53119 -0.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 14.6 hedge funds with bullish positions and the average amount invested in these stocks was $53 million. That figure was $5 million in LMAT’s case. American Axle & Manufacturing Holdings, Inc. (NYSE:AXL) is the most popular stock in this table. On the other hand Nexgen Energy Ltd. (NYSE:NXE) is the least popular one with only 6 bullish hedge fund positions. LeMaitre Vascular Inc (NASDAQ:LMAT) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for LMAT is 23.6. 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 31.6% in 2020 through December 2nd and still beat the market by 16 percentage points. A small number of hedge funds were also right about betting on LMAT as the stock returned 14.9% since the end of the third quarter (through 12/2) and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.