Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the first quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Lakeland Bancorp, Inc. (NASDAQ:LBAI) based on that data and determine whether they were really smart about the stock.
Lakeland Bancorp, Inc. (NASDAQ:LBAI) shares haven't seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 10 hedge funds' portfolios at the end of the first quarter of 2020. 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 Arbor Realty Trust, Inc. (NYSE:ABR), LendingClub Corp (NYSE:LC), and Seacor Holdings, Inc. (NYSE:CKH) to gather more data points. Our calculations also showed that LBAI 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.
In the eyes of most market participants, hedge funds are seen as slow, outdated financial vehicles of years past. While there are over 8000 funds in operation at present, We look at the bigwigs of this group, about 850 funds. It is estimated that this group of investors control the lion's share of the hedge fund industry's total asset base, and by keeping an eye on their matchless equity investments, Insider Monkey has unearthed various investment strategies that have historically beaten the broader indices. Insider Monkey's flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
[caption id="attachment_189632" align="aligncenter" width="400"] David Harding of Winton Capital Management[/caption]
At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a "weekend trading strategy", so we look into his strategy's picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller's investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now let's take a look at the key hedge fund action encompassing Lakeland Bancorp, Inc. (NASDAQ:LBAI).
What does smart money think about Lakeland Bancorp, Inc. (NASDAQ:LBAI)?
At Q1's end, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 12 hedge funds with a bullish position in LBAI a year ago. With hedgies' sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, holds the number one position in Lakeland Bancorp, Inc. (NASDAQ:LBAI). Renaissance Technologies has a $12.4 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second most bullish fund manager is Basswood Capital, led by Matthew Lindenbaum, holding a $3 million position; 0.4% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors that hold long positions include D. E. Shaw's D E Shaw, Ken Griffin's Citadel Investment Group and John Overdeck and David Siegel's Two Sigma Advisors. In terms of the portfolio weights assigned to each position Lucas Capital Management allocated the biggest weight to Lakeland Bancorp, Inc. (NASDAQ:LBAI), around 1.16% of its 13F portfolio. Basswood Capital is also relatively very bullish on the stock, dishing out 0.36 percent of its 13F equity portfolio to LBAI.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Winton Capital Management. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Bailard Inc).
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Lakeland Bancorp, Inc. (NASDAQ:LBAI) but similarly valued. These stocks are Arbor Realty Trust, Inc. (NYSE:ABR), LendingClub Corp (NYSE:LC), Seacor Holdings, Inc. (NYSE:CKH), and ScanSource, Inc. (NASDAQ:SCSC). This group of stocks' market valuations resemble LBAI's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ABR,14,37504,-7 LC,7,2595,-1 CKH,9,77355,-7 SCSC,14,52677,-1 Average,11,42533,-4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $43 million. That figure was $21 million in LBAI's case. Arbor Realty Trust, Inc. (NYSE:ABR) is the most popular stock in this table. On the other hand LendingClub Corp (NYSE:LC) is the least popular one with only 7 bullish hedge fund positions. Lakeland Bancorp, Inc. (NASDAQ:LBAI) 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 12.3% in 2020 through June 30th and surpassed the market by 15.5 percentage points. Unfortunately LBAI wasn't nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); LBAI investors were disappointed as the stock returned 7% 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.
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Disclosure: None. This article was originally published at Insider Monkey.