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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 873 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 June 30th. In this article we look at what those investors think of Open Lending Corporation (NASDAQ:LPRO).
Open Lending Corporation (NASDAQ:LPRO) has experienced a decrease in enthusiasm from smart money in recent months. Open Lending Corporation (NASDAQ:LPRO) was in 24 hedge funds' portfolios at the end of the second quarter of 2021. The all time high for this statistic is 34. Our calculations also showed that LPRO isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
David Harding of Winton Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we're going to take a glance at the fresh hedge fund action regarding Open Lending Corporation (NASDAQ:LPRO).
Do Hedge Funds Think LPRO Is A Good Stock To Buy Now?
At the end of June, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -27% from one quarter earlier. On the other hand, there were a total of 20 hedge funds with a bullish position in LPRO a year ago. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey's hedge fund database, Mina Faltas's Washington Harbour Partners has the biggest position in Open Lending Corporation (NASDAQ:LPRO), worth close to $91.4 million, corresponding to 14.4% of its total 13F portfolio. Coming in second is Crescent Park Management, led by Eli Cohen, holding a $59.8 million position; the fund has 8.9% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism consist of Richard Driehaus's Driehaus Capital, Steve Cohen's Point72 Asset Management and Chuck Royce's Royce & Associates. In terms of the portfolio weights assigned to each position Washington Harbour Partners allocated the biggest weight to Open Lending Corporation (NASDAQ:LPRO), around 14.39% of its 13F portfolio. Isomer Partners is also relatively very bullish on the stock, designating 8.94 percent of its 13F equity portfolio to LPRO.
Due to the fact that Open Lending Corporation (NASDAQ:LPRO) has faced bearish sentiment from the entirety of the hedge funds we track, it's easy to see that there was a specific group of fund managers who were dropping their entire stakes by the end of the second quarter. Interestingly, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital cut the biggest investment of all the hedgies monitored by Insider Monkey, comprising about $7.4 million in stock, and Michael Gelband's ExodusPoint Capital was right behind this move, as the fund said goodbye to about $6.8 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 9 funds by the end of the second quarter.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Open Lending Corporation (NASDAQ:LPRO) but similarly valued. We will take a look at Regal Beloit Corporation (NYSE:RBC), MAXIMUS, Inc. (NYSE:MMS), Pilgrim's Pride Corporation (NASDAQ:PPC), Diversey Holdings, Ltd. (NASDAQ:DSEY), Crane Co. (NYSE:CR), KBR, Inc. (NYSE:KBR), and Ballard Power Systems Inc. (NASDAQ:BLDP). This group of stocks' market values are closest to LPRO's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RBC,31,391844,1 MMS,26,128750,8 PPC,18,88832,2 DSEY,12,171364,-9 CR,25,303503,8 KBR,36,1046690,5 BLDP,15,131568,-3 Average,23.3,323222,1.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.3 hedge funds with bullish positions and the average amount invested in these stocks was $323 million. That figure was $434 million in LPRO's case. KBR, Inc. (NYSE:KBR) is the most popular stock in this table. On the other hand Diversey Holdings, Ltd. (NASDAQ:DSEY) is the least popular one with only 12 bullish hedge fund positions. Open Lending Corporation (NASDAQ:LPRO) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for LPRO is 42.2. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through October 22nd and beat the market again by 1.6 percentage points. Unfortunately LPRO wasn't nearly as popular as these 5 stocks and hedge funds that were betting on LPRO were disappointed as the stock returned -22.9% since the end of June (through 10/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.