Most investors tend to think that hedge funds and other asset managers are worthless, as they cannot beat even simple index fund portfolios. In fact, most people expect hedge funds to compete with and outperform the bull market that we have witnessed in recent years. However, hedge funds are generally partially hedged and aim at delivering attractive risk-adjusted returns rather than following the ups and downs of equity markets hoping that they will outperform the broader market. Our research shows that certain hedge funds do have great stock picking skills (and we can identify these hedge funds in advance pretty accurately), so let’s take a glance at the smart money sentiment towards Lakeland Financial Corporation (NASDAQ:LKFN).
Is Lakeland Financial Corporation (NASDAQ:LKFN) the right pick for your portfolio? Money managers were getting more optimistic. The number of long hedge fund positions moved up by 1 in recent months. Lakeland Financial Corporation (NASDAQ:LKFN) was in 10 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 12. Our calculations also showed that LKFN isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 9 hedge funds in our database with LKFN positions at the end of the first quarter.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Paul Tudor Jones of Tudor Investment Corp
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Keeping this in mind let’s go over the latest hedge fund action surrounding Lakeland Financial Corporation (NASDAQ:LKFN).
Do Hedge Funds Think LKFN Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards LKFN over the last 24 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Lakeland Financial Corporation (NASDAQ:LKFN), with a stake worth $3.9 million reported as of the end of June. Trailing Renaissance Technologies was ExodusPoint Capital, which amassed a stake valued at $2.4 million. Tudor Investment Corp, Winton Capital Management, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Winton Capital Management allocated the biggest weight to Lakeland Financial Corporation (NASDAQ:LKFN), around 0.05% of its 13F portfolio. ExodusPoint Capital is also relatively very bullish on the stock, designating 0.03 percent of its 13F equity portfolio to LKFN.
Consequently, key hedge funds were breaking ground themselves. Two Sigma Advisors, managed by John Overdeck and David Siegel, established the largest position in Lakeland Financial Corporation (NASDAQ:LKFN). Two Sigma Advisors had $0.2 million invested in the company at the end of the quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Lakeland Financial Corporation (NASDAQ:LKFN) but similarly valued. These stocks are Mack Cali Realty Corp (NYSE:CLI), SecureWorks Corp. (NASDAQ:SCWX), Oceaneering International (NYSE:OII), nLIGHT, Inc. (NASDAQ:LASR), Horace Mann Educators Corporation (NYSE:HMN), CSG Systems International, Inc. (NASDAQ:CSGS), and Comstock Resources Inc (NYSE:CRK). This group of stocks’ market values are similar to LKFN’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CLI | 17 | 53577 | 9 |
| SCWX | 12 | 37228 | 0 |
| OII | 17 | 100930 | -3 |
| LASR | 14 | 69065 | -4 |
| HMN | 15 | 49487 | 1 |
| CSGS | 23 | 142591 | 0 |
| CRK | 20 | 145762 | 6 |
| Average | 16.9 | 85520 | 1.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.9 hedge funds with bullish positions and the average amount invested in these stocks was $86 million. That figure was $11 million in LKFN’s case. CSG Systems International, Inc. (NASDAQ:CSGS) is the most popular stock in this table. On the other hand SecureWorks Corp. (NASDAQ:SCWX) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Lakeland Financial Corporation (NASDAQ:LKFN) is even less popular than SCWX. Our overall hedge fund sentiment score for LKFN is 31. 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. Hedge funds clearly dropped the ball on LKFN as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 25.7% in 2021 through September 27th and still beat the market by 6.2 percentage points. A small number of hedge funds were also right about betting on LKFN as the stock returned 14.3% since Q2 (through September 27th) and outperformed the market by an even larger margin.
Follow Lakeland Financial Corp (NASDAQ:LKFN)
Follow Lakeland Financial Corp (NASDAQ:LKFN)
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Disclosure: None. This article was originally published at Insider Monkey.
