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Littelfuse, Inc. (LFUS): Hedge Funds Are Bullish and Insiders Are Undecided, What Should You Do?

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Is Littelfuse, Inc. (NASDAQ:LFUS) a good investment?

If you were to ask many traders, hedge funds are viewed as overrated, old financial vehicles of an era lost to time. Although there are over 8,000 hedge funds in operation currently, this site aim at the aristocrats of this group, around 525 funds. Analysts calculate that this group controls the majority of the hedge fund industry’s total capital, and by keeping an eye on their highest performing equity investments, we’ve brought to light a number of investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).

Equally as necessary, optimistic insider trading activity is a second way to analyze the marketplace. There are plenty of incentives for a corporate insider to cut shares of his or her company, but just one, very simple reason why they would buy. Various empirical studies have demonstrated the market-beating potential of this tactic if investors know what to do (learn more here).

Thus, we’re going to discuss the newest info for Littelfuse, Inc. (NASDAQ:LFUS).

What does the smart money think about Littelfuse, Inc. (NASDAQ:LFUS)?

At the end of the second quarter, a total of 16 of the hedge funds we track held long positions in this stock, a change of 14% from the first quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their holdings substantially.

Littelfuse, Inc. (NASDAQ:LFUS)When using filings from the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the largest position in Littelfuse, Inc. (NASDAQ:LFUS). Royce & Associates has a $157.9 million position in the stock, comprising 0.5% of its 13F portfolio. Coming in second is John W. Rogers of Ariel Investments, with a $77.8 million position; 1.3% of its 13F portfolio is allocated to the company. Other peers that hold long positions include Jim Simons’s Renaissance Technologies, Mario Gabelli’s GAMCO Investors and Ken Fisher’s Fisher Asset Management.

As industrywide interest increased, specific money managers were leading the bulls’ herd. Royce & Associates, managed by Chuck Royce, initiated the most valuable position in Littelfuse, Inc. (NASDAQ:LFUS). Royce & Associates had 157.9 million invested in the company at the end of the quarter. John W. Rogers’s Ariel Investments also initiated a $77.8 million position during the quarter. The other funds with brand new LFUS positions are Jim Simons’s Renaissance Technologies, Mario Gabelli’s GAMCO Investors, and Ken Fisher’s Fisher Asset Management.

Insider trading activity in Littelfuse, Inc. (NASDAQ:LFUS)

Bullish insider trading is best served when the company we’re looking at has seen transactions within the past 180 days. Over the last six-month time period, Littelfuse, Inc. (NASDAQ:LFUS) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also examine the relationship between both of these indicators in other stocks similar to Littelfuse, Inc. (NASDAQ:LFUS). These stocks are EnerSys (NYSE:ENS), GrafTech International Ltd (NYSE:GTI), General Cable Corporation (NYSE:BGC), OSI Systems, Inc. (NASDAQ:OSIS), and Franklin Electric Co. (NASDAQ:FELE). This group of stocks are the members of the industrial electrical equipment industry and their market caps resemble LFUS’s market cap.

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