Should you add Ladder Capital Corp (NYSE:LADR) to your equity portfolio? There are a lot of metrics to assess a stock’s ‘worthiness’, so to say. Some traders use technical data, others do in-depth research of the company to identify its potential. Smart money investors usually fall in the latter category, as they perform detailed fundamental analysis and employ lots of resources that are not available to a retail investor.
Therefore, since hedge funds and other institutional investors do a lot of research in picking stocks, can we somehow mimic their moves? One of the ways to identify which stocks these big money managers choose to invest in is to follow their quarterly 13F filings. Even though they are filed with a delay of up to 45 days after the end of each quarter, due to the general long-term focus, we can still use this data effectively. Moreover, a look into hedge funds’ letters to investors can sometimes provide some details about an investor’s opinion about an individual company.
At Insider Monkey, we develop investment strategies based on an analysis of the 13F filings of over 700 hedge funds and other institutional investors. Our latest strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 39.7% gains over the past 12 months and outperformed the 24.1% gain enjoyed by the S&P 500 ETFs. Our enhanced small-cap hedge fund strategy returned more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points over the last 4.5 years (see more details).
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So, when it comes to Ladder Capital Corp (NYSE:LADR), it is far from being popular among the funds we track, although this can be attributed to its small size. However, the stock registered an increase in the number of bullish investors during the fourth quarter, as there were 15 funds holding shares of the company at the end of December, versus eight funds a quarter earlier. Moreover, the total value of their positions surged to $117.43 million from $60.68 million and represented 7.80% of the company’s outstanding stock at the end of the year.
Follow Ladder Capital Corp (NYSE:LADR)
Follow Ladder Capital Corp (NYSE:LADR)
Among the funds in our database, Glenn J. Krevlin‘s Glenhill Advisors is the largest shareholder of Ladder Capital Corp (NYSE:LADR), having disclosed ownership of 3.26 million shares in its latest 13F filing. In addition, Anand Parekh‘s Alyeska Investment Group and Emanuel J. Friedman’s EJF Capital initiated stakes in the company during the final three months of 2016; they own 1.33 million shares and 1.26 million shares, respectively.
On the next page, we will discuss some of the potential catalysts that led to investors piling into Ladder Capital Corp.
Ladder Capital Corp (NYSE:LADR) is a $1.50 billion real estate investment trust that invests in commercial mortgage-backed securities, as well as commercial real estate, including office buildings and a warehouse, and residential real estate. Since it’s an REIT, it’s not surprising that Ladder has a high dividend yield, of around 9%. Moreover, with the Fed planning to speed up interest rate hikes this year, Ladder is on track to make more money and is likely to further boost its dividend this year. Moreover, since the company is diversified across several segments and has a robust real estate portfolio, it is more secure as an income-generating investment.
For its latest quarter, Ladder Capital Corp (NYSE:LADR) reported core earnings of $0.37 per share, lower than estimates of $0.39, and below the previous year figure of $0.45. The company also posted a book value of $14.76 per share, which is higher than its current price of around $13.70. Earlier this month, Ladder reiterated its $0.30 per-share dividend and a number of funds conducted a secondary offering of 3.00 million shares at around $14 apiece.
To sum up, Ladder Capital Corp (NYSE:LADR) looks like an interesting investment worth further exploration. Even though the company doesn’t have many smart money investors holding its stock, it did register a notable increase in popularity and as interest rates go higher, it is likely that more funds will seek to invest in stocks positioned to benefit from the hike.
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