The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of LogMeIn Inc (NASDAQ:LOGM).
LogMeIn Inc (NASDAQ:LOGM) has experienced a decrease in enthusiasm from smart money lately. Our calculations also showed that LOGM isn’t among the 30 most popular stocks among hedge funds (click for Q1 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.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. 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 S&P 500 ETFs by 58 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 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.
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s take a look at the latest hedge fund action encompassing LogMeIn Inc (NASDAQ:LOGM).
Hedge fund activity in LogMeIn Inc (NASDAQ:LOGM)
At Q1’s end, a total of 28 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -10% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards LOGM over the last 18 quarters. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
Among these funds, Water Island Capital held the most valuable stake in LogMeIn Inc (NASDAQ:LOGM), which was worth $122.6 million at the end of the third quarter. On the second spot was Elliott Management which amassed $112.7 million worth of shares. Alpine Associates, Omni Partners, and TIG Advisors 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 Sand Grove Capital Partners allocated the biggest weight to LogMeIn Inc (NASDAQ:LOGM), around 9.43% of its 13F portfolio. Water Island Capital is also relatively very bullish on the stock, dishing out 8.86 percent of its 13F equity portfolio to LOGM.
Due to the fact that LogMeIn Inc (NASDAQ:LOGM) has experienced bearish sentiment from the aggregate hedge fund industry, logic holds that there were a few hedgies who were dropping their entire stakes in the first quarter. At the top of the heap, Renaissance Technologies dropped the largest position of the 750 funds monitored by Insider Monkey, totaling close to $58.1 million in stock. David Paradice’s fund, Paradice Investment Management, also cut its stock, about $42.4 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 3 funds in the first quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as LogMeIn Inc (NASDAQ:LOGM) but similarly valued. We will take a look at Anaplan, Inc. (NYSE:PLAN), Xerox Holdings Corporation (NYSE:XRX), Autoliv Inc. (NYSE:ALV), and Black Hills Corporation (NYSE:BKH). All of these stocks’ market caps match LOGM’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 31.25 hedge funds with bullish positions and the average amount invested in these stocks was $754 million. That figure was $759 million in LOGM’s case. Anaplan, Inc. (NYSE:PLAN) is the most popular stock in this table. On the other hand Autoliv Inc. (NYSE:ALV) is the least popular one with only 15 bullish hedge fund positions. LogMeIn Inc (NASDAQ:LOGM) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May and surpassed the market by 13.2 percentage points. Unfortunately LOGM wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); LOGM investors were disappointed as the stock returned 1.9% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.