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 Logitech International SA (NASDAQ:LOGI) makes for a good investment right now.
Is LOGI a good stock to buy now? Logitech International SA (NASDAQ:LOGI) shareholders have witnessed an increase in support from the world’s most elite money managers lately. Logitech International SA (NASDAQ:LOGI) was in 15 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 19. There were 13 hedge funds in our database with LOGI positions at the end of the second quarter. Our calculations also showed that LOGI 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 financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a 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. With all of this in mind we’re going to analyze the key hedge fund action regarding Logitech International SA (NASDAQ:LOGI).
Do Hedge Funds Think LOGI Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of 15% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards LOGI over the last 21 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in Logitech International SA (NASDAQ:LOGI), which was worth $175 million at the end of the third quarter. On the second spot was Maverick Capital which amassed $100.3 million worth of shares. Two Sigma Advisors, Arrowstreet Capital, and Marshall Wace LLP 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 Maverick Capital allocated the biggest weight to Logitech International SA (NASDAQ:LOGI), around 1.86% of its 13F portfolio. PDT Partners is also relatively very bullish on the stock, earmarking 0.68 percent of its 13F equity portfolio to LOGI.
As one would reasonably expect, specific money managers have been driving this bullishness. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, assembled the largest position in Logitech International SA (NASDAQ:LOGI). Arrowstreet Capital had $38.1 million invested in the company at the end of the quarter. Louis Navellier’s Navellier & Associates also initiated a $2.6 million position during the quarter. The other funds with new positions in the stock are John A. Levin’s Levin Capital Strategies and Michael Gelband’s ExodusPoint Capital.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Logitech International SA (NASDAQ:LOGI) but similarly valued. These stocks are 10x Genomics, Inc. (NASDAQ:TXG), Masimo Corporation (NASDAQ:MASI), Avantor, Inc. (NYSE:AVTR), Telefonica Brasil SA (NYSE:VIV), Expedia Group Inc (NASDAQ:EXPE), PPD, Inc. (NASDAQ:PPD), and Alliant Energy Corporation (NYSE:LNT). All of these stocks’ market caps are similar to LOGI’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 36.3 hedge funds with bullish positions and the average amount invested in these stocks was $1044 million. That figure was $406 million in LOGI’s case. Expedia Group Inc (NASDAQ:EXPE) is the most popular stock in this table. On the other hand Telefonica Brasil SA (NYSE:VIV) is the least popular one with only 13 bullish hedge fund positions. Logitech International SA (NASDAQ:LOGI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for LOGI is 32.6. 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 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on LOGI as the stock returned 15.6% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.