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Is Logitech International SA (LOGI) A Good Stock To Buy?

After several tireless days we have finished crunching the numbers from nearly 750 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of June 28. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Logitech International SA (NASDAQ:LOGI).

Is Logitech International SA (NASDAQ:LOGI) a healthy stock for your portfolio? Prominent investors are taking an optimistic view. The number of long hedge fund bets moved up by 1 recently. Our calculations also showed that LOGI isn’t among the 30 most popular stocks among hedge funds (view the video below). LOGI was in 16 hedge funds’ portfolios at the end of June. There were 15 hedge funds in our database with LOGI positions at the end of the previous quarter.
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.

LOGI_oct2019

Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to take a peek at the latest hedge fund action regarding Logitech International SA (NASDAQ:LOGI).

What does smart money think about Logitech International SA (NASDAQ:LOGI)?

Heading into the third quarter of 2019, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 7% from one quarter earlier. By comparison, 16 hedge funds held shares or bullish call options in LOGI a year ago. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).

Richard Driehaus

Of the funds tracked by Insider Monkey, Renaissance Technologies, holds the most valuable position in Logitech International SA (NASDAQ:LOGI). Renaissance Technologies has a $98.4 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Two Sigma Advisors, managed by John Overdeck and David Siegel, which holds a $41.2 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining members of the smart money that are bullish include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Paul Marshall and Ian Wace’s Marshall Wace LLP and Peter Muller’s PDT Partners.

As aggregate interest increased, key hedge funds were leading the bulls’ herd. Maverick Capital, managed by Lee Ainslie, initiated the largest position in Logitech International SA (NASDAQ:LOGI). Maverick Capital had $3.7 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $1 million position during the quarter. The following funds were also among the new LOGI investors: Richard Driehaus’s Driehaus Capital, Minhua Zhang’s Weld Capital Management, and Matthew Hulsizer’s PEAK6 Capital Management.

Let’s also examine hedge fund activity in other stocks similar to Logitech International SA (NASDAQ:LOGI). These stocks are ANGI Homeservices Inc. (NASDAQ:ANGI), GCI Liberty, Inc. (NASDAQ:GLIBA), Tripadvisor Inc (NASDAQ:TRIP), and Ciena Corporation (NYSE:CIEN). This group of stocks’ market valuations resemble LOGI’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ANGI 20 206353 -2
GLIBA 38 2029549 2
TRIP 26 1216550 -1
CIEN 36 555109 6
Average 30 1001890 1.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 30 hedge funds with bullish positions and the average amount invested in these stocks was $1002 million. That figure was $208 million in LOGI’s case. GCI Liberty, Inc. (NASDAQ:GLIBA) is the most popular stock in this table. On the other hand ANGI Homeservices Inc. (NASDAQ:ANGI) is the least popular one with only 20 bullish hedge fund positions. Compared to these stocks Logitech International SA (NASDAQ:LOGI) is even less popular than ANGI. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. A small number of hedge funds were also right about betting on LOGI, though not to the same extent, as the stock returned 2.5% during the third quarter and outperformed the market as well.

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

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