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Is it a Smart Choice to Invest in Live Oak (LOB)?

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·2 min read
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Diamond Hill Capital, an investment management firm, published its “Diamond Hill Small Cap Fund” first-quarter 2022 investor letter – a copy of which can be downloaded here. Diamond Hill invests on behalf of clients through a shared commitment to its valuation-driven investment principles, long-term perspective, capacity discipline, and client alignment. Amid a rocky market environment, the portfolio’s negative returns still outpaced the Russell 2000 Index by a healthy margin in Q1.  Try to take some time looking at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, Diamond Hill Small Cap Fund mentioned Live Oak Bancshares, Inc. (NASDAQ:LOB) and explained its insights for the company. Founded in 2008, Live Oak Bancshares, Inc. (NASDAQ:LOB) is a Wilmington, North Carolina-based bank holding company with a $1.4 billion market capitalization. Live Oak Bancshares, Inc. (NASDAQ:LOB) delivered a -63.52% return since the beginning of the year, while its 12-month returns are down by -47.43%. The stock closed at $31.84 per share on July 12, 2022.

Here is what Diamond Hill Small Cap Fund has to say about Live Oak Bancshares, Inc. (NASDAQ:LOB) in its Q1 2022 investor letter:

"Amid a rocky market environment, our portfolio’s negative returns still outpaced the Russell 2000 Index by a healthy margin in Q1. Relative performance was aided by strength among our consumer staples holdings — in aggregate, their positive returns outpaced the market. We were further aided by our above-benchmark exposure. Our health care holdings buoyed results, as did our underweight exposure to technology, which took a beating in the first half of the quarter. Our energy holdings, though positive, trailed index peers, weighing on results, and our below-benchmark exposure was an additional headwind. Our consumer discretionary holdings were another source of relative weakness as economic uncertainty re-emerged tied to higher inflation expectations. Other detractors in Q1 included Live Oak Bancshares (NASDAQ:LOB). Regional bank Live Oak’s fundamentals remain strong, though shares sold off in sympathy with other bank names. "

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Our calculations show that Live Oak Bancshares, Inc. (NASDAQ:LOB) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Live Oak Bancshares, Inc. (NASDAQ:LOB) was in 24 hedge fund portfolios at the end of the first quarter of 2022, compared to 16 funds in the previous quarter. Live Oak Bancshares, Inc. (NASDAQ:LOB) delivered a -32.60% return in the past 3 months.

In March 2022, we also shared another hedge fund’s views on Live Oak Bancshares, Inc. (NASDAQ:LOB) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

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