The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of June 30th. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards LendingClub Corp (NYSE:LC).
Is LendingClub Corp (NYSE:LC) a bargain? The smart money was betting on the stock. The number of long hedge fund bets rose by 4 in recent months. LendingClub Corp (NYSE:LC) was in 23 hedge funds’ portfolios at the end of June. The all time high for this statistic is 24. Our calculations also showed that LC isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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Matthew Lindenbaum of Basswood Capital
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Do Hedge Funds Think LC Is A Good Stock To Buy Now?
At the end of June, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of 21% from one quarter earlier. On the other hand, there were a total of 12 hedge funds with a bullish position in LC 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.
According to Insider Monkey’s hedge fund database, ARK Investment Management, managed by Catherine D. Wood, holds the most valuable position in LendingClub Corp (NYSE:LC). ARK Investment Management has a $127.9 million position in the stock, comprising 0.2% of its 13F portfolio. The second most bullish fund manager is Basswood Capital, led by Matthew Lindenbaum, holding a $46.6 million position; the fund has 1.9% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish include Paul Marshall and Ian Wace’s Marshall Wace LLP, D. E. Shaw’s D E Shaw and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. In terms of the portfolio weights assigned to each position No Street Capital allocated the biggest weight to LendingClub Corp (NYSE:LC), around 3.13% of its 13F portfolio. Parian Global Management is also relatively very bullish on the stock, designating 2.96 percent of its 13F equity portfolio to LC.
As industrywide interest jumped, key money managers were leading the bulls’ herd. Tudor Investment Corp, managed by Paul Tudor Jones, assembled the largest position in LendingClub Corp (NYSE:LC). Tudor Investment Corp had $1.2 million invested in the company at the end of the quarter. Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors also made a $0.7 million investment in the stock during the quarter. The other funds with brand new LC positions are Greg Eisner’s Engineers Gate Manager, Ran Pang’s Quantamental Technologies, and Jinghua Yan’s TwinBeech Capital.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as LendingClub Corp (NYSE:LC) but similarly valued. These stocks are PRA Group, Inc. (NASDAQ:PRAA), Adtalem Global Education Inc. (NYSE:ATGE), Tattooed Chef, Inc. (NASDAQ:TTCF), Super Micro Computer, Inc. (NASDAQ:SMCI), Viant Technology Inc. (NASDAQ:DSP), Hope Bancorp, Inc. (NASDAQ:HOPE), and Veritex Holdings Inc (NASDAQ:VBTX). This group of stocks’ market valuations resemble LC’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PRAA | 15 | 48282 | 0 |
| ATGE | 19 | 295188 | -3 |
| TTCF | 7 | 38898 | -3 |
| SMCI | 20 | 373688 | -1 |
| DSP | 6 | 12575 | -8 |
| HOPE | 16 | 78597 | 3 |
| VBTX | 9 | 38993 | 3 |
| Average | 13.1 | 126603 | -1.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.1 hedge funds with bullish positions and the average amount invested in these stocks was $127 million. That figure was $375 million in LC’s case. Super Micro Computer, Inc. (NASDAQ:SMCI) is the most popular stock in this table. On the other hand Viant Technology Inc. (NASDAQ:DSP) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks LendingClub Corp (NYSE:LC) is more popular among hedge funds. Our overall hedge fund sentiment score for LC is 87.8. 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 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 returned 24% in 2021 through October 22nd but still managed to beat the market by 1.6 percentage points. Hedge funds were also right about betting on LC as the stock returned 89.6% since the end of June (through 10/22) 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.
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Disclosure: None. This article was originally published at Insider Monkey.
