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In this article we will take a look at whether hedge funds think Hamilton Lane Incorporated (NASDAQ:HLNE) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is HLNE a good stock to buy now? The smart money was in a pessimistic mood. The number of long hedge fund positions decreased by 3 lately. Hamilton Lane Incorporated (NASDAQ:HLNE) was in 16 hedge funds' portfolios at the end of September. The all time high for this statistic is 19. Our calculations also showed that HLNE isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). There were 19 hedge funds in our database with HLNE positions at the end of the second quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Today there are a lot of signals market participants use to grade publicly traded companies. Two of the most underrated signals are hedge fund and insider trading activity. We have shown that, historically, those who follow the top picks of the best fund managers can outpace the S&P 500 by a solid margin (see the details here).
Paul Marshall of Marshall Wace
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. With all of this in mind let's review the key hedge fund action regarding Hamilton Lane Incorporated (NASDAQ:HLNE).
Do Hedge Funds Think HLNE Is A Good Stock To Buy Now?
At Q3's end, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -16% from the second quarter of 2020. By comparison, 15 hedge funds held shares or bullish call options in HLNE 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 Hamilton Lane Incorporated (NASDAQ:HLNE) was held by Renaissance Technologies, which reported holding $32.8 million worth of stock at the end of September. It was followed by Marshall Wace LLP with a $10.6 million position. Other investors bullish on the company included Columbus Circle Investors, Citadel Investment Group, and GLG Partners. In terms of the portfolio weights assigned to each position Columbus Circle Investors allocated the biggest weight to Hamilton Lane Incorporated (NASDAQ:HLNE), around 0.44% of its 13F portfolio. Marshall Wace LLP is also relatively very bullish on the stock, dishing out 0.07 percent of its 13F equity portfolio to HLNE.
Due to the fact that Hamilton Lane Incorporated (NASDAQ:HLNE) has witnessed declining sentiment from the smart money, it's easy to see that there is a sect of fund managers that decided to sell off their full holdings by the end of the third quarter. Interestingly, Israel Englander's Millennium Management dumped the largest stake of the 750 funds watched by Insider Monkey, comprising an estimated $4.6 million in stock, and Richard Driehaus's Driehaus Capital was right behind this move, as the fund cut about $3.3 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 3 funds by the end of the third quarter.
Let's go over hedge fund activity in other stocks similar to Hamilton Lane Incorporated (NASDAQ:HLNE). We will take a look at Lightspeed POS Inc. (NYSE:LSPD), SL Green Realty Corp (NYSE:SLG), New Relic Inc (NYSE:NEWR), Velodyne Lidar, Inc. (NASDAQ:VLDR), Twist Bioscience Corporation (NASDAQ:TWST), Stantec Inc. (NYSE:STN), and Iridium Communications Inc. (NASDAQ:IRDM). This group of stocks' market caps are similar to HLNE's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LSPD,11,158403,11 SLG,23,208309,-3 NEWR,31,1144221,-4 VLDR,13,121409,-3 TWST,21,408033,2 STN,8,82259,3 IRDM,15,135802,-4 Average,17.4,322634,0.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.4 hedge funds with bullish positions and the average amount invested in these stocks was $323 million. That figure was $76 million in HLNE's case. New Relic Inc (NYSE:NEWR) is the most popular stock in this table. On the other hand Stantec Inc. (NYSE:STN) is the least popular one with only 8 bullish hedge fund positions. Hamilton Lane Incorporated (NASDAQ:HLNE) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for HLNE is 44.7. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on HLNE as the stock returned 13.5% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.