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Here’s Why Bernzott Capital was Disappointed in LendingTree (TREE)

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Jose Karlo Mari Tottoc
·3 min read
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Bernzott Capital Advisors, an investment management firm, published its fourth quarter 2020 investor letter – a copy of which can be downloaded here. A return of 24.41% was recorded by the fund in the fourth quarter of 2020, below its R2000V and R2500V benchmarks that delivered a 33.36% and 28.51% return respectively in the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Bernzott Capital Advisors, in their Q4 2020 investor letter, mentioned LendingTree, Inc. (NASDAQ: TREE) and emphasized their views on the company. LendingTree, Inc. is a Charlotte, North Carolina-based online lending marketplace that currently has a $2.9 billion market capitalization. Since the beginning of the year, TREE delivered a -19.34% return, extending its 12-month gains to 10.55%. As of March 23, 2021, the stock closed at $220.83 per share.

Here is what Bernzott Capital Advisors has to say about LendingTree, Inc. in their Q4 2020 investor letter:

"LendingTree (TREE): A disappointing earnings outlook for 4Q, followed by GCI Liberty’s sale of its long-held, non-core equity interest in TREE, both weighed on the stock price. While its insurance business was strong, the company experienced softness from consumer lending and credit card firms which have restrained marketing spending, hesitant to extend new credit. TREE remains well positioned to capitalize on improved trends expected in 2021."

Our calculations show that LendingTree, Inc. (NASDAQ: TREE) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, LendingTree, Inc. was in 26 hedge fund portfolios, compared to 20 funds in the third quarter. TREE delivered a -19.99% 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.