Should You Buy Lumos Networks Corp (LMOS)?

Lumos Networks Corp (NASDAQ:LMOS) was in 8 hedge funds’ portfolio at the end of the fourth quarter of 2012. LMOS shareholders have witnessed an increase in enthusiasm from smart money lately. There were 5 hedge funds in our database with LMOS holdings at the end of the previous quarter.

Lumos Networks Corp (NASDAQ:LMOS)

In the 21st century investor’s toolkit, there are tons of metrics shareholders can use to track Mr. Market. A duo of the most under-the-radar are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best fund managers can outperform their index-focused peers by a healthy margin (see just how much).

Equally as key, bullish insider trading sentiment is a second way to parse down the financial markets. Just as you’d expect, there are many motivations for an upper level exec to cut shares of his or her company, but just one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the useful potential of this tactic if you know what to do (learn more here).

With all of this in mind, it’s important to take a peek at the recent action regarding Lumos Networks Corp (NASDAQ:LMOS).

What have hedge funds been doing with Lumos Networks Corp (NASDAQ:LMOS)?

Heading into 2013, a total of 8 of the hedge funds we track were bullish in this stock, a change of 60% from one quarter earlier. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were upping their holdings considerably.

According to our comprehensive database, Archer Capital Management, managed by Eric Edidin and Josh Lobel, holds the most valuable position in Lumos Networks Corp (NASDAQ:LMOS). Archer Capital Management has a $21.3 million position in the stock, comprising 3.4% of its 13F portfolio. The second largest stake is held by Spencer M. Waxman of Shannon River Fund Management, with a $10.5 million position; the fund has 1.4% of its 13F portfolio invested in the stock. Remaining peers that hold long positions include Clint Carlson’s Carlson Capital, Jacob Gottlieb’s Visium Asset Management and Israel Englander’s Millennium Management.

As industrywide interest jumped, specific money managers have jumped into Lumos Networks Corp (NASDAQ:LMOS) headfirst. Visium Asset Management, managed by Jacob Gottlieb, initiated the most valuable position in Lumos Networks Corp (NASDAQ:LMOS). Visium Asset Management had 2 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $0.4 million investment in the stock during the quarter. The only other fund with a brand new LMOS position is Charles Davidson’s Wexford Capital.

How are insiders trading Lumos Networks Corp (NASDAQ:LMOS)?

Insider trading activity, especially when it’s bullish, is particularly usable when the primary stock in question has seen transactions within the past half-year. Over the last six-month time period, Lumos Networks Corp (NASDAQ:LMOS) has experienced 1 unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Lumos Networks Corp (NASDAQ:LMOS). These stocks are Cbeyond, Inc. (NASDAQ:CBEY), RigNet Inc (NASDAQ:RNET), Hawaiian Telcom HoldCo Inc (NASDAQ:HCOM), ORBCOMM Inc (NASDAQ:ORBC), and IDT Corporation (NYSE:IDT). All of these stocks are in the diversified communication services industry and their market caps resemble LMOS’s market cap.