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Is Houlihan Lokey (HLI) A Smart Long-Term Buy?

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·3 min read
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  • HLI
  • ^GSPC

ClearBridge Investments, an investment management firm, published its “SMID Cap Growth Strategy” first quarter 2021 investor letter – a copy of which can be downloaded here. The ClearBridge SMID Cap Growth Strategy outperformed in the first quarter as their preference for sturdy fundamentals and value-creating management teams provided ballast amid rising speculation in newly public risk assets favored on online message boards. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

ClearBridge Investments, in its Q1 2021 investor letter, mentioned Houlihan Lokey, Inc. (NYSE: HLI), and shared their insights on the company. Houlihan Lokey, Inc. is a Los Angeles, California-based investment banking company that currently has a $5.09 billion market capitalization. Since the beginning of the year, HLI delivered a 11.19% return, extending its 12-month gains to 24.69%. As of June 01, 2021, the stock closed at $74.75 per share.

Here is what ClearBridge Investments has to say about Houlihan Lokey, Inc. in its Q1 2021 investor letter:

"Houlihan Lokey, in the financials sector, is a regional investment bank that advises on mergers & acquisitions and company restructuring as well as capital raising to primarily mid and small cap companies. We added the position based on favorable M&A volumes, a significant presence in the middle market with good diversification across clients and industries, and balanced revenue streams between a cyclical evaluation and more cyclical M&A/restructuring activity."

Pixabay/Public Domain

Our calculations show that Houlihan Lokey, Inc. (NYSE: HLI) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the first quarter of 2021, Houlihan Lokey, Inc. was in 16 hedge fund portfolios, compared to 26 funds in the fourth quarter of 2020. HLI delivered a 15.05% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

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