Is LPRO Stock A Buy or Sell?

Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Open Lending Corporation (NASDAQ:LPRO) in this article.

Is LPRO stock a buy? Open Lending Corporation (NASDAQ:LPRO) investors should be aware of an increase in hedge fund sentiment recently. Open Lending Corporation (NASDAQ:LPRO) was in 34 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 23. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 23 hedge funds in our database with LPRO positions at the end of the third quarter. Our calculations also showed that LPRO isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

Robert Atchinson of Adage Capital Management

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 124 percentage points since March 2017 (see the details here). At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 10 best battery stocks to buy to identify the next stock with 10x upside potential. 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 website. With all of this in mind let’s take a look at the recent hedge fund action surrounding Open Lending Corporation (NASDAQ:LPRO).

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

At the end of the fourth quarter, a total of 34 of the hedge funds tracked by Insider Monkey were long this stock, a change of 48% from one quarter earlier. On the other hand, there were a total of 17 hedge funds with a bullish position in LPRO a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Point72 Asset Management held the most valuable stake in Open Lending Corporation (NASDAQ:LPRO), which was worth $88.6 million at the end of the fourth quarter. On the second spot was Crescent Park Management which amassed $82.7 million worth of shares. Parsifal Capital Management, Adage Capital Management, and Washington Harbour Partners were 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 Collaborative Holdings Management allocated the biggest weight to Open Lending Corporation (NASDAQ:LPRO), around 16.59% of its 13F portfolio. Crescent Park Management is also relatively very bullish on the stock, designating 12.08 percent of its 13F equity portfolio to LPRO.

With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. Washington Harbour Partners, managed by Mina Faltas, created the most valuable position in Open Lending Corporation (NASDAQ:LPRO). Washington Harbour Partners had $60.4 million invested in the company at the end of the quarter. Sheetal Sharma’s Collaborative Holdings Management also made a $23.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Chuck Royce’s Royce & Associates, Ravi Chopra’s Azora Capital, and John Khabbaz’s Phoenician Capital.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Open Lending Corporation (NASDAQ:LPRO) but similarly valued. We will take a look at Companhia Energética de Minas Gerais (NYSE:CIG), Sunnova Energy International Inc. (NYSE:NOVA), ASGN Incorporated (NYSE:ASGN), Verint Systems Inc. (NASDAQ:VRNT), Workiva Inc (NYSE:WK), eXp World Holdings, Inc. (NASDAQ:EXPI), and SSR Mining Inc. (NASDAQ:SSRM). This group of stocks’ market caps are closest to LPRO’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 19.3 hedge funds with bullish positions and the average amount invested in these stocks was $325 million. That figure was $686 million in LPRO’s case. Sunnova Energy International Inc. (NYSE:NOVA) is the most popular stock in this table. On the other hand Companhia Energética de Minas Gerais (NYSE:CIG) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Open Lending Corporation (NASDAQ:LPRO) is more popular among hedge funds. Our overall hedge fund sentiment score for LPRO is 90. 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. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks returned 7.9% in 2021 through April 1st but still managed to beat the market by 0.4 percentage points. Hedge funds were also right about betting on LPRO as the stock returned 18.1% since the end of December (through 4/1) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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