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Is Open Lending Corp (LPRO) a Smart Long-term Buy?

·3 min read

Wasatch Micro Cap Fund recently released its Q3 2020 Investor Letter, a copy of which you can download here. The fund posted a return of 12.2% for the quarter, outperforming its benchmark, the Russell Microcap Index which returned 3.69% in the same quarter. You should check out Wasatch's top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.

In the Q3 2020 Investor Letter, Wasatch highlighted a few stocks and Open Lending Corp (NASDAQ:LPRO) is one of them. Open Lending Corp (NASDAQ:LPRO) provides automated lending services to financial institutions. Year-to-date, Open Lending Corp (NASDAQ:LPRO) stock gained 215.5% and on December 23rd it had a closing price of $33.25. Here is what Wasatch said:

"The top contributor to Fund performance for the quarter was Open Lending Corp. (LPRO). The company provides loan analytics, risk-based pricing and automated-decision technology for automotive lenders. Although Open Lending is classified as a financial company, it incurs no credit risk. Instead, it offers a fee-based platform that enables lenders to assess the creditworthiness of car buyers more accurately. Open Lending’s stock price rose steadily during the third quarter as the company continued to acquire new customers. Because adding customers is neither capital- nor labor-intensive, a high percentage of Open Lending’s incremental revenue flows through to the bottom line."

Ghost Tree Capital's AUM, Returns and Holdings
Ghost Tree Capital's AUM, Returns and Holdings

everything possible/Shutterstock.com

Last month, we published an article revealing that Forager Funds is bullish on Open Lending Corp (NASDAQ:LPRO) stock. The investment firm believes that the company has a huge $250 billion addressable market.

In Q2 2020, the number of bullish hedge fund positions on Open Lending Corp (NASDAQ:LPRO) stock increased by about 11% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in Open Lending's growth potential. Our calculations showed that Open Lending Corp (NASDAQ:LPRO) isn't ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 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. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

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 10 most profitable companies in the world 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:

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