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Hedge Funds Are Nibbling On Lakeland Financial Corporation (LKFN)

Asma UL Husna

In this article we will check out the progression of hedge fund sentiment towards Lakeland Financial Corporation (NASDAQ:LKFN) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.

Lakeland Financial Corporation (NASDAQ:LKFN) was in 9 hedge funds' portfolios at the end of March. LKFN investors should pay attention to an increase in activity from the world's largest hedge funds recently. There were 8 hedge funds in our database with LKFN positions at the end of the previous quarter. Our calculations also showed that LKFN 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 21st century investor’s toolkit there are a lot of gauges stock traders put to use to appraise their holdings. Two of the most innovative gauges are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the best picks of the best fund managers can outpace the broader indices by a superb margin (see the details here).

[caption id="attachment_673876" align="aligncenter" width="392"] John Overdeck of Two Sigma Advisors[/caption]

John Overdeck of Two Sigma

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. 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 glance at the latest hedge fund action surrounding Lakeland Financial Corporation (NASDAQ:LKFN).

What have hedge funds been doing with Lakeland Financial Corporation (NASDAQ:LKFN)?

At the end of the first quarter, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from the previous quarter. By comparison, 11 hedge funds held shares or bullish call options in LKFN a year ago. With hedgies' capital changing hands, there exists a few key hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Renaissance Technologies, holds the most valuable position in Lakeland Financial Corporation (NASDAQ:LKFN). Renaissance Technologies has a $10.7 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second most bullish fund manager is Citadel Investment Group, led by Ken Griffin, holding a $1.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers that hold long positions encompass Peter Muller's PDT Partners, David Harding's Winton Capital Management and Israel Englander's Millennium Management. In terms of the portfolio weights assigned to each position PDT Partners allocated the biggest weight to Lakeland Financial Corporation (NASDAQ:LKFN), around 0.09% of its 13F portfolio. Winton Capital Management is also relatively very bullish on the stock, earmarking 0.02 percent of its 13F equity portfolio to LKFN.

Now, specific money managers have jumped into Lakeland Financial Corporation (NASDAQ:LKFN) headfirst. Millennium Management, managed by Israel Englander, created the most outsized position in Lakeland Financial Corporation (NASDAQ:LKFN). Millennium Management had $0.5 million invested in the company at the end of the quarter. John Overdeck and David Siegel's Two Sigma Advisors also initiated a $0.5 million position during the quarter.

Let's now review hedge fund activity in other stocks similar to Lakeland Financial Corporation (NASDAQ:LKFN). These stocks are Sally Beauty Holdings, Inc. (NYSE:SBH), The Bank of N.T. Butterfield & Son Limited (NYSE:NTB), Supernus Pharmaceuticals Inc (NASDAQ:SUPN), and Canadian Solar Inc. (NASDAQ:CSIQ). This group of stocks' market values match LKFN's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SBH,19,73261,-8 NTB,18,68973,1 SUPN,23,130980,3 CSIQ,11,86580,-3 Average,17.75,89949,-1.75 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 17.75 hedge funds with bullish positions and the average amount invested in these stocks was $90 million. That figure was $16 million in LKFN's case. Supernus Pharmaceuticals Inc (NASDAQ:SUPN) is the most popular stock in this table. On the other hand Canadian Solar Inc. (NASDAQ:CSIQ) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Lakeland Financial Corporation (NASDAQ:LKFN) is even less popular than CSIQ. 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 13.4% in 2020 through June 22nd but managed to beat the market by 15.9 percentage points. A small number of hedge funds were also right about betting on LKFN, though not to the same extent, as the stock returned 21.9% during the second quarter (through June 22nd) and outperformed the market as well.

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Disclosure: None. This article was originally published at Insider Monkey.

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