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After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of December 31st. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards LendingTree, Inc (NASDAQ:TREE).
Is TREE stock a buy? Investors who are in the know were becoming more confident. The number of long hedge fund bets inched up by 6 lately. LendingTree, Inc (NASDAQ:TREE) was in 26 hedge funds' portfolios at the end of December. The all time high for this statistic is 29. Our calculations also showed that TREE isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings). There were 20 hedge funds in our database with TREE positions at the end of the third quarter.
Cathie Wood of ARK Investment Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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. Keeping this in mind we're going to review the new hedge fund action regarding LendingTree, Inc (NASDAQ:TREE).
Do Hedge Funds Think TREE Is A Good Stock To Buy Now?
At the end of the fourth quarter, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a change of 30% from the third quarter of 2020. Below, you can check out the change in hedge fund sentiment towards TREE over the last 22 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Catherine D. Wood's ARK Investment Management has the most valuable position in LendingTree, Inc (NASDAQ:TREE), worth close to $550.4 million, comprising 1.5% of its total 13F portfolio. On ARK Investment Management's heels is Citadel Investment Group, managed by Ken Griffin, which holds a $74.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers that are bullish encompass Gavin Baker's Atreides Management, Stephen Perkins's Toronado Partners and Israel Englander's Millennium Management. In terms of the portfolio weights assigned to each position Toronado Partners allocated the biggest weight to LendingTree, Inc (NASDAQ:TREE), around 7.57% of its 13F portfolio. Atreides Management is also relatively very bullish on the stock, setting aside 2.99 percent of its 13F equity portfolio to TREE.
As aggregate interest increased, key hedge funds have jumped into LendingTree, Inc (NASDAQ:TREE) headfirst. Atreides Management, managed by Gavin Baker, assembled the most valuable position in LendingTree, Inc (NASDAQ:TREE). Atreides Management had $68.1 million invested in the company at the end of the quarter. Stephen Perkins's Toronado Partners also initiated a $28.6 million position during the quarter. The following funds were also among the new TREE investors: Frank Fu's CaaS Capital, Andrew Kurita's Kettle Hill Capital Management, and Matthew Hulsizer's PEAK6 Capital Management.
Let's now review hedge fund activity in other stocks similar to LendingTree, Inc (NASDAQ:TREE). These stocks are CarGurus, Inc. (NASDAQ:CARG), Mantech International Corp (NASDAQ:MANT), Altra Industrial Motion Corp. (NASDAQ:AIMC), Stamps.com Inc. (NASDAQ:STMP), Colliers International Group Inc (NASDAQ:CIGI), CareDx, Inc. (NASDAQ:CDNA), and Armstrong World Industries, Inc. (NYSE:AWI). This group of stocks' market valuations match TREE's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CARG,33,381083,1 MANT,11,15468,-6 AIMC,15,64840,-7 STMP,38,576953,7 CIGI,11,792298,1 CDNA,20,613805,-5 AWI,31,458470,1 Average,22.7,414702,-1.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.7 hedge funds with bullish positions and the average amount invested in these stocks was $415 million. That figure was $846 million in TREE's case. Stamps.com Inc. (NASDAQ:STMP) is the most popular stock in this table. On the other hand Mantech International Corp (NASDAQ:MANT) is the least popular one with only 11 bullish hedge fund positions. LendingTree, Inc (NASDAQ:TREE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TREE is 64.7. 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. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and beat the market again by 0.9 percentage points. Unfortunately TREE wasn't nearly as popular as these 30 stocks and hedge funds that were betting on TREE were disappointed as the stock returned -20.3% since the end of December (through 4/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 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.