We can judge whether Live Oak Bancshares Inc (NASDAQ:LOB) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, research shows that these picks historically outperformed the market when we factor in known risk factors.
Is Live Oak Bancshares Inc (NASDAQ:LOB) a buy here? LOB started trading in the second half of July and until September 30, eight funds from our database acquired shares. At the end of this article we will also compare LOB to other stocks, including Gigamon Inc (NYSE:GIMO), Kulicke and Soffa Industries Inc. (NASDAQ:KLIC), and Textura Corp (NYSE:TXTR) to get a better sense of its popularity.
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Today there are plenty of gauges stock market investors have at their disposal to evaluate stocks. Some of the most useful gauges are hedge fund and insider trading interest. We have shown that, historically, those who follow the best picks of the top money managers can beat the S&P 500 by a healthy margin (see the details here).
With all of this in mind, we’re going to go over the new action surrounding Live Oak Bancshares Inc (NASDAQ:LOB).
What have hedge funds been doing with Live Oak Bancshares Inc (NASDAQ:LOB)?
According to Insider Monkey’s hedge fund database, Richard Driehaus’s Driehaus Capital has the largest position in Live Oak Bancshares Inc (NASDAQ:LOB), worth close to $8.2 million, corresponding to 0.3% of its total 13F portfolio. The second largest stake is held by Chuck Royce’s Royce & Associates, with a $5.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism include Israel Englander’s Millennium Management, Julian Robertson’s Tiger Management and Anton Schutz’s Mendon Capital Advisors.
Let’s check out hedge fund activity in other stocks similar to Live Oak Bancshares Inc (NASDAQ:LOB). We will take a look at Gigamon Inc (NYSE:GIMO), Kulicke and Soffa Industries Inc. (NASDAQ:KLIC), Textura Corp (NYSE:TXTR), and AAR Corp. (NYSE:AIR). This group of stocks’ market values match LOB’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GIMO | 24 | 104657 | 0 |
| KLIC | 16 | 55659 | 1 |
| TXTR | 6 | 17725 | 0 |
| AIR | 22 | 50756 | 7 |
As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $57 million. That figure was $27 million in LOB’s case. Gigamon Inc (NYSE:GIMO) is the most popular stock in this table. On the other hand, Textura Corp (NYSE:TXTR) is the least popular one with only 6 bullish hedge fund positions. Live Oak Bancshares Inc (NASDAQ:LOB) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard GIMO might be a better candidate to consider a long position.