Is On Deck Capital Inc (NYSE:ONDK) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
On Deck Capital Inc (NYSE:ONDK) was in 8 hedge funds’ portfolios at the end of September. On Deck Capital Inc (NYSE:ONDK) shareholders have witnessed a decrease in enthusiasm from smart money of late. There were 11 hedge funds in our database with On Deck Capital Inc (NYSE:ONDK) positions at the end of the previous quarter. For investors tracking the share performance of the company, it may not come as a surprise, as the shares of On Deck Capital Inc (NYSE:ONDK) dropped 14.51% during the third quarter.
For an in-depth understanding of the hedge fund sentiment, we will cover hedge funds that held stakes in On Deck Capital Inc (NYSE:ONDK), at the end of the last quarter. Further, we will also compare On Deck Capital Inc (NYSE:ONDK) to other stocks, including Tsakos Energy Navigation Ltd. (NYSE:TNP), Genomic Health, Inc. (NASDAQ:GHDX), and Oritani Financial Corp. (NASDAQ:ORIT) to get a better sense of its popularity.
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According to most traders, hedge funds are perceived as slow, old investment tools of yesteryear. While there are greater than 8000 funds in operation at present, our researchers choose to focus on the aristocrats of this group, approximately 700 funds. These hedge fund managers control bulk of all hedge funds’ total capital, and by keeping an eye on their best stock picks, Insider Monkey has revealed numerous investment strategies that have historically outpaced the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy outstripped the S&P 500 index by 12 percentage points per annum for a decade in their back tests.
With all of this in mind, we’re going to go over the key action encompassing On Deck Capital Inc (NYSE:ONDK).
What have hedge funds been doing with On Deck Capital Inc (NYSE:ONDK)?
Heading into Q4, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a drop of 27% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Chase Coleman’s Tiger Global Management LLC has the most valuable position in On Deck Capital Inc (NYSE:ONDK), worth close to $67.8 million, comprising 0.8% of its total 13F portfolio. On Tiger Global Management LLC’s heels is Eashwar Krishnan of Tybourne Capital Management, with a $58.4 million position; the fund has 4.1% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors with similar optimism contain Brian Jackelow’s SAB Capital Management, Joseph A. Jolson’s Harvest Capital Strategies, and Legg Mason Capital Management.
Due to the fact that On Deck Capital Inc (NYSE:ONDK) has witnessed a falling interest from the aggregate hedge fund industry, logic holds that there were a few funds that elected to cut their entire stakes in the third quarter. Intriguingly, Ken Griffin’s Citadel Investment Group said goodbye to the biggest investment of the 700 funds followed by Insider Monkey, valued at an estimated $1.1 million in stock. Andrew Sandler’s fund, Sandler Capital Management, also dumped its stock, about $0.9 million worth of shares. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 3 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as On Deck Capital Inc (NYSE:ONDK) but similarly valued. These stocks are Tsakos Energy Navigation Ltd. (NYSE:TNP), Genomic Health, Inc. (NASDAQ:GHDX), Oritani Financial Corp. (NASDAQ:ORIT), and Wingstop Inc (NASDAQ:WING). This group of stocks’ market valuations are similar to On Deck Capital Inc (NYSE:ONDK)’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TNP | 19 | 112951 | 3 |
| GHDX | 13 | 404189 | -2 |
| ORIT | 12 | 40620 | -1 |
| WING | 10 | 21395 | -4 |
As you can see, these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $145 million. That figure was $170 million in On Deck Capital Inc (NYSE:ONDK)’s case. Tsakos Energy Navigation Ltd. (NYSE:TNP) is the most popular stock in this table. On the other hand, Wingstop Inc (NASDAQ:WING) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks, On Deck Capital Inc (NYSE:ONDK) is even less popular than Wingstop Inc (NASDAQ:WING). Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case, more research is warranted.