Here is What Hedge Funds Think About Lion Group Holding Ltd. (LGHL)

Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Lion Group Holding Ltd. (NASDAQ:LGHL), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Lion Group Holding Ltd. (NASDAQ:LGHL) was in 3 hedge funds’ portfolios at the end of March. The all time high for this statistic is 5. LGHL has experienced a decrease in enthusiasm from smart money recently. There were 4 hedge funds in our database with LGHL positions at the end of the fourth quarter. Our calculations also showed that LGHL isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.

Bart Baum of Ionic Capital Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery 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 analyze the latest hedge fund action surrounding Lion Group Holding Ltd. (NASDAQ:LGHL).

Do Hedge Funds Think LGHL Is A Good Stock To Buy Now?

At the end of March, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -25% from the fourth quarter of 2020. The graph below displays the number of hedge funds with bullish position in LGHL over the last 23 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Symmetry Peak Management was the largest shareholder of Lion Group Holding Ltd. (NASDAQ:LGHL), with a stake worth $1.4 million reported as of the end of March. Trailing Symmetry Peak Management was Ionic Capital Management, which amassed a stake valued at $1 million. Citadel Investment Group was 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 Symmetry Peak Management allocated the biggest weight to Lion Group Holding Ltd. (NASDAQ:LGHL), around 4.72% of its 13F portfolio. Ionic Capital Management is also relatively very bullish on the stock, setting aside 0.13 percent of its 13F equity portfolio to LGHL.

Judging by the fact that Lion Group Holding Ltd. (NASDAQ:LGHL) has experienced bearish sentiment from hedge fund managers, it’s safe to say that there were a few funds who were dropping their full holdings last quarter. At the top of the heap, Sander Gerber’s Hudson Bay Capital Management said goodbye to the largest stake of the “upper crust” of funds tracked by Insider Monkey, totaling about $0 million in stock, and Phillip Goldstein, Andrew Dakos and Steven Samuels’s Bulldog Investors was right behind this move, as the fund dropped about $0 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 1 funds last quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Lion Group Holding Ltd. (NASDAQ:LGHL) but similarly valued. These stocks are The Alkaline Water Company Inc. (NASDAQ:WTER), Guaranty Federal Bancshares, Inc. (NASDAQ:GFED), First National Corporation (NASDAQ:FXNC), Amesite Inc. (NASDAQ:AMST), Ranger Energy Services, Inc. (NYSE:RNGR), Richardson Electronics, Ltd. (NASDAQ:RELL), and Lifeway Foods, Inc. (NASDAQ:LWAY). This group of stocks’ market values are closest to LGHL’s market value.

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As you can see these stocks had an average of 2.6 hedge funds with bullish positions and the average amount invested in these stocks was $4 million. That figure was $3 million in LGHL’s case. Richardson Electronics, Ltd. (NASDAQ:RELL) is the most popular stock in this table. On the other hand Amesite Inc. (NASDAQ:AMST) is the least popular one with only 1 bullish hedge fund positions. Lion Group Holding Ltd. (NASDAQ:LGHL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for LGHL is 55.3. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 17.2% in 2021 through June 11th and beat the market again by 3.3 percentage points. Unfortunately LGHL wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on LGHL were disappointed as the stock returned -46.2% since the end of March (through 6/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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