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Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Open Lending Corporation (NASDAQ:LPRO), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is Open Lending Corporation (NASDAQ:LPRO) an exceptional investment today? The smart money was becoming less confident. The number of bullish hedge fund positions fell by 1 recently. Open Lending Corporation (NASDAQ:LPRO) was in 33 hedge funds' portfolios at the end of March. 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 Q1 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 115 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.
John Overdeck of Two Sigma Advisors
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Do Hedge Funds Think LPRO Is A Good Stock To Buy Now?
At the end of March, a total of 33 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -3% from the previous quarter. On the other hand, there were a total of 18 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.
The largest stake in Open Lending Corporation (NASDAQ:LPRO) was held by Point72 Asset Management, which reported holding $78.3 million worth of stock at the end of December. It was followed by Crescent Park Management with a $68.3 million position. Other investors bullish on the company included Washington Harbour Partners, Parsifal Capital Management, and Millennium Management. In terms of the portfolio weights assigned to each position Crescent Park Management allocated the biggest weight to Open Lending Corporation (NASDAQ:LPRO), around 11.56% of its 13F portfolio. Washington Harbour Partners is also relatively very bullish on the stock, earmarking 11.22 percent of its 13F equity portfolio to LPRO.
Because Open Lending Corporation (NASDAQ:LPRO) has faced a decline in interest from the entirety of the hedge funds we track, we can see that there was a specific group of hedge funds who sold off their full holdings by the end of the first quarter. It's worth mentioning that Joseph Samuels's Islet Management dropped the biggest position of the "upper crust" of funds monitored by Insider Monkey, worth about $34.3 million in stock, and Zachary Miller's Parian Global Management was right behind this move, as the fund dumped about $21.7 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 1 funds by the end of the first quarter.
Let's check out hedge fund activity in other stocks similar to Open Lending Corporation (NASDAQ:LPRO). These stocks are Sonos, Inc. (NASDAQ:SONO), Qurate Retail, Inc. (NASDAQ:QRTEA), Home Bancshares, Inc. (Conway, AR) (NASDAQ:HOMB), Inovalon Holdings Inc (NASDAQ:INOV), Highwoods Properties Inc (NYSE:HIW), Ortho Clinical Diagnostics Holdings plc (NASDAQ:OCDX), and PacWest Bancorp (NASDAQ:PACW). This group of stocks' market valuations are similar to LPRO's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SONO,46,763124,3 QRTEA,31,776294,-5 HOMB,6,48515,-6 INOV,17,108170,-5 HIW,20,117413,-1 OCDX,23,328347,23 PACW,31,599517,1 Average,24.9,391626,1.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.9 hedge funds with bullish positions and the average amount invested in these stocks was $392 million. That figure was $512 million in LPRO's case. Sonos, Inc. (NASDAQ:SONO) is the most popular stock in this table. On the other hand Home Bancshares, Inc. (Conway, AR) (NASDAQ:HOMB) is the least popular one with only 6 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 66.9. 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. 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 22.8% in 2021 through July 2nd and still beat the market by 6 percentage points. Hedge funds were also right about betting on LPRO, though not to the same extent, as the stock returned 14.9% since Q1 (through July 2nd) and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.