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 752 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 September 30th. In this article we look at what those investors think of On Deck Capital Inc (NYSE:ONDK).
Is On Deck Capital Inc (NYSE:ONDK) worth your attention right now? Investors who are in the know are getting less optimistic. The number of bullish hedge fund positions retreated by 4 in recent months. Our calculations also showed that ONDK isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
According to most shareholders, hedge funds are viewed as slow, outdated investment tools of years past. While there are greater than 8000 funds with their doors open at present, Our researchers look at the aristocrats of this group, around 750 funds. Most estimates calculate that this group of people control most of the hedge fund industry's total capital, and by tracking their best equity investments, Insider Monkey has spotted many investment strategies that have historically surpassed the S&P 500 index. Insider Monkey's flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points a year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
[caption id="attachment_373490" align="aligncenter" width="640"] Wall Street Bull[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world's largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds' buy/sell signals. Let's take a glance at the latest hedge fund action encompassing On Deck Capital Inc (NYSE:ONDK).
Hedge fund activity in On Deck Capital Inc (NYSE:ONDK)
Heading into the fourth quarter of 2019, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -22% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in ONDK over the last 17 quarters. With hedgies' sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
The largest stake in On Deck Capital Inc (NYSE:ONDK) was held by Nantahala Capital Management, which reported holding $21.5 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $18.5 million position. Other investors bullish on the company included 683 Capital Partners, D E Shaw, and EJF Capital. In terms of the portfolio weights assigned to each position Voce Capital allocated the biggest weight to On Deck Capital Inc (NYSE:ONDK), around 1.7% of its 13F portfolio. 683 Capital Partners is also relatively very bullish on the stock, dishing out 1.39 percent of its 13F equity portfolio to ONDK.
Because On Deck Capital Inc (NYSE:ONDK) has experienced falling interest from the smart money, it's easy to see that there were a few hedgies that decided to sell off their entire stakes by the end of the third quarter. Interestingly, George McCabe's Portolan Capital Management sold off the largest investment of the "upper crust" of funds monitored by Insider Monkey, totaling close to $4.2 million in stock, and Ken Griffin's Citadel Investment Group was right behind this move, as the fund dumped about $1.8 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 4 funds by the end of the third quarter.
Let's check out hedge fund activity in other stocks similar to On Deck Capital Inc (NYSE:ONDK). We will take a look at Global Water Resources, Inc. (NASDAQ:GWRS), Briggs & Stratton Corporation (NYSE:BGG), Arlo Technologies, Inc. (NYSE:ARLO), and Western New England Bancorp, Inc. (NASDAQ:WNEB). This group of stocks' market caps match ONDK's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GWRS,4,10150,-1 BGG,10,13142,-1 ARLO,11,25088,-3 WNEB,5,23226,2 Average,7.5,17902,-0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.5 hedge funds with bullish positions and the average amount invested in these stocks was $18 million. That figure was $80 million in ONDK's case. Arlo Technologies, Inc. (NYSE:ARLO) is the most popular stock in this table. On the other hand Global Water Resources, Inc. (NASDAQ:GWRS) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks On Deck Capital Inc (NYSE:ONDK) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on ONDK as the stock returned 22.3% during the first two months of Q4 and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.