How do we determine whether Cardlytics, Inc. (NASDAQ:CDLX) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
Is Cardlytics, Inc. (NASDAQ:CDLX) the right pick for your portfolio? Investors who are in the know are buying. The number of bullish hedge fund positions advanced by 1 recently. Our calculations also showed that CDLX isn’t among the 30 most popular stocks among hedge funds (see the video below). CDLX was in 10 hedge funds’ portfolios at the end of the second quarter of 2019. There were 9 hedge funds in our database with CDLX holdings at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
At the moment there are a large number of formulas market participants put to use to analyze publicly traded companies. A pair of the less known formulas are hedge fund and insider trading moves. We have shown that, historically, those who follow the top picks of the top money managers can trounce the S&P 500 by a healthy amount (see the details here).
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s take a gander at the key hedge fund action regarding Cardlytics, Inc. (NASDAQ:CDLX).
How are hedge funds trading Cardlytics, Inc. (NASDAQ:CDLX)?
At the end of the second quarter, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in CDLX over the last 16 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, CAS Investment Partners was the largest shareholder of Cardlytics, Inc. (NASDAQ:CDLX), with a stake worth $56.2 million reported as of the end of March. Trailing CAS Investment Partners was Cannell Capital, which amassed a stake valued at $16.3 million. Shannon River Fund Management, Driehaus Capital, and Antipodean Advisors were also very fond of the stock, giving the stock large weights in their portfolios.
Now, key money managers have jumped into Cardlytics, Inc. (NASDAQ:CDLX) headfirst. CAS Investment Partners, managed by Clifford A. Sosin, created the biggest position in Cardlytics, Inc. (NASDAQ:CDLX). CAS Investment Partners had $56.2 million invested in the company at the end of the quarter. Richard Driehaus’s Driehaus Capital also made a $6.4 million investment in the stock during the quarter. The following funds were also among the new CDLX investors: Eric Chen’s Antipodean Advisors, Ari Zweiman’s 683 Capital Partners, and Israel Englander’s Millennium Management.
Let’s check out hedge fund activity in other stocks similar to Cardlytics, Inc. (NASDAQ:CDLX). These stocks are Precision BioSciences, Inc. (NASDAQ:DTIL), Live Oak Bancshares Inc (NASDAQ:LOB), Retail Value Inc. (NYSE:RVI), and Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX). All of these stocks’ market caps are closest to CDLX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DTIL | 9 | 64292 | -5 |
| LOB | 6 | 33226 | -4 |
| RVI | 17 | 78786 | 0 |
| LXRX | 11 | 18702 | -1 |
| Average | 10.75 | 48752 | -2.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $49 million. That figure was $103 million in CDLX’s case. Retail Value Inc. (NYSE:RVI) is the most popular stock in this table. On the other hand Live Oak Bancshares Inc (NASDAQ:LOB) is the least popular one with only 6 bullish hedge fund positions. Cardlytics, Inc. (NASDAQ:CDLX) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. A small number of hedge funds were also right about betting on CDLX as the stock returned 29% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
