Is LogMeIn Inc (LOGM) A Good Stock To Buy?

The elite funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at LogMeIn Inc (NASDAQ:LOGM) from the perspective of those elite funds.

Is LogMeIn Inc (NASDAQ:LOGM) a buy right now? Money managers are turning less bullish. The number of long hedge fund bets shrunk by 3 lately. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Gannett Co., Inc. (NYSE:GCI), Mueller Industries, Inc. (NYSE:MLI), and DuPont Fabros Technology, Inc. (NYSE:DFT) to gather more data points.

With all of this in mind, let’s take a peek at the recent action encompassing LogMeIn Inc (NASDAQ:LOGM).

What have hedge funds been doing with LogMeIn Inc (NASDAQ:LOGM)?

At Q3’s end, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -12% from the previous quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Cadian Capital, managed by Eric Bannasch, holds the most valuable position in LogMeIn Inc (NASDAQ:LOGM). Cadian Capital has a $38.3 million position in the stock, comprising 1.4% of its 13F portfolio. Coming in second is Renaissance Technologies, led by Jim Simons, holding a $33.2 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other members of the smart money with similar optimism encompass Paul Marshall and Ian Wace’s Marshall Wace LLP, Columbus Circle Investors and Glen Kacher’s Light Street Capital.

Due to the fact that LogMeIn Inc (NASDAQ:LOGM) has faced falling interest from the entirety of the hedge funds we track, it’s safe to say that there were a few funds who sold off their positions entirely by the end of the third quarter. At the top of the heap, Israel Englander’s Millennium Management cut the biggest stake of the 700 funds watched by Insider Monkey, worth an estimated $8.8 million in stock. Ken Griffin’s fund, Citadel Investment Group, also dropped its stock, about $1.8 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 3 funds by the end of the third quarter.

Let’s go over hedge fund activity in other stocks similar to LogMeIn Inc (NASDAQ:LOGM). We will take a look at Gannett Co., Inc. (NYSE:GCI), Mueller Industries, Inc. (NYSE:MLI), DuPont Fabros Technology, Inc. (NYSE:DFT), and Planet Fitness Inc (NYSE:PLNT). This group of stocks’ market caps match LOGM’s market cap.

As you can see these stocks had an average of 15.75 hedge funds with bullish positions and the average amount invested in these stocks was $180 million. That figure was $178 million in LOGM’s case. Gannett Co., Inc. (NYSE:GCI) is the most popular stock in this table. On the other hand Planet Fitness Inc (NYSE:PLNT) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks LogMeIn Inc (NASDAQ:LOGM) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.