Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
Is Ladenburg Thalmann Financial Services (NYSEMKT:LTS) an exceptional investment now? The best stock pickers are getting more bullish. The number of long hedge fund bets that are revealed through 13F filings improved by 1 in recent months. LTS was in 6 hedge funds’ portfolios at the end of September. There were 5 hedge funds in our database with LTS positions at the end of June. At the end of this article we will also compare LTS to other stocks including Gener8 Maritime Inc (NYSE:GNRT), Haverty Furniture Companies, Inc. (NYSE:HVT), and Xinyuan Real Estate Co., Ltd. (ADR) (NYSE:XIN) to get a better sense of its popularity.
Follow Ladenburg Thalmann Financial Services Inc. (NYSEMKT:LTS)
Follow Ladenburg Thalmann Financial Services Inc. (NYSEMKT:LTS)
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
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How have hedgies been trading Ladenburg Thalmann Financial Services (NYSEMKT:LTS)?
At the end of the third quarter, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 20% increase from one quarter earlier. On the other hand, there were a total of 5 hedge funds with a bullish position in LTS at the beginning of this year, which rose and then declined by the same amount in the following 2 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Jim Simons’ Renaissance Technologies has the most valuable position in Ladenburg Thalmann Financial Services (NYSEMKT:LTS), worth close to $0.8 million. The second largest stake is held by D E Shaw, founded by David E. Shaw, which has a $0.3 million position. Some other professional money managers that are bullish encompass Ken Griffin’s Citadel Investment Group, Mark Coe’s Coe Capital Management, and Israel Englander’s Millennium Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds, which is based on the performance of their 13F long positions in non-micro-cap stocks.
Now, some big names were breaking ground themselves. Millennium Management, one of the 10 largest hedge funds in the world, established the biggest position in Ladenburg Thalmann Financial Services (NYSEMKT:LTS). Millennium Management had $0.1 million invested in the company at the end of the quarter.
Let’s now review hedge fund activity in other stocks similar to Ladenburg Thalmann Financial Services (NYSEMKT:LTS). These stocks are Gener8 Maritime Inc (NYSE:GNRT), Haverty Furniture Companies, Inc. (NYSE:HVT), Xinyuan Real Estate Co., Ltd. (ADR) (NYSE:XIN), and Tarena International Inc(ADR) (NASDAQ:TEDU). This group of stocks’ market values are similar to LTS’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GNRT | 16 | 215979 | -1 |
| HVT | 11 | 68022 | 1 |
| XIN | 8 | 19766 | 2 |
| TEDU | 7 | 22223 | -1 |
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $81 million. That figure was just $2 million in LTS’s case. Gener8 Maritime Inc (NYSE:GNRT) is the most popular stock in this table. On the other hand Tarena International Inc(ADR) (NASDAQ:TEDU) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Ladenburg Thalmann Financial Services (NYSEMKT:LTS) is even less popular than TEDU. 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.
Disclosure: None
