At Insider Monkey, we pore over the filings of more than 700 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not LendingTree Inc (NASDAQ:TREE) makes for a good investment right now.
LendingTree Inc (NASDAQ:TREE) has experienced an increase in hedge fund interest lately. TREE was in 24 hedge funds’ portfolios at the end of the third quarter of 2015. There were 18 hedge funds in our database with TREE positions at the end of the previous quarter. At the end of this article we will also compare TREE to other stocks including Kearny Financial Corp. (NASDAQ:KRNY), Caesarstone Sdot-Yam Ltd (NASDAQ:CSTE), and Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) to get a better sense of its popularity.
Follow Lendingtree Inc. (NASDAQ:TREE)
Follow Lendingtree Inc. (NASDAQ:TREE)
To most investors, hedge funds are perceived as slow, old investment vehicles of yesteryear. While there are greater than an 8000 funds with their doors open today, We hone in on the aristocrats of this club, approximately 700 funds. These money managers watch over the lion’s share of the smart money’s total asset base, and by shadowing their best equity investments, Insider Monkey has revealed numerous investment strategies that have historically defeated the broader indices. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points per annum for a decade in their back tests.
With all of this in mind, let’s check out the recent action surrounding LendingTree Inc (NASDAQ:TREE).
Hedge fund activity in LendingTree Inc. (NASDAQ:TREE)
At Q3’s end, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of 33% from one quarter earlier. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, G2 Investment Partners Management, managed by Josh Goldberg, holds the biggest position in LendingTree Inc. (NASDAQ:TREE). G2 Investment Partners Management has a $36.6 million position in the stock, comprising 13.6% of its 13F portfolio. The second most bullish fund manager is Driehaus Capital, led by Richard Driehaus, holding a $19.5 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that are bullish encompass Jim Simons’s Renaissance Technologies, Columbus Circle Investors and Drew Cupps’s Cupps Capital Management.
As industrywide interest jumped, key hedge funds have been driving this bullishness. Whale Rock Capital Management, managed by Alex Sacerdote, assembled the largest position in LendingTree Inc (NASDAQ:TREE). Whale Rock Capital Management had $5.5 million invested in the company at the end of the quarter. David Costen Haley’s HBK Investments also made a $2.1 million investment in the stock during the quarter. The other funds with new positions in the stock are Chao Ku’s Nine Chapters Capital Management, William C. Martin’s Raging Capital Management, and Glenn Russell Dubin’s Highbridge Capital Management.
Let’s also examine hedge fund activity in other stocks similar to LendingTree Inc. (NASDAQ:TREE). We will take a look at Kearny Financial Corp. (NASDAQ:KRNY), Caesarstone Sdot-Yam Ltd (NASDAQ:CSTE), Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB), and Trex Company, Inc. (NYSE:TREX). This group of stocks’ market caps match TREE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KRNY | 22 | 164038 | 1 |
| CSTE | 22 | 100532 | 5 |
| RRGB | 21 | 110890 | -4 |
| TREX | 16 | 104811 | 4 |
As you can see these stocks had an average of 20.25 hedge funds with bullish positions and the average amount invested in these stocks was $120 million. That figure was $124 million in TREE’s case. Kearny Financial Corp. (NASDAQ:KRNY) is the most popular stock in this table. On the other hand Trex Company, Inc. (NYSE:TREX) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks LendingTree Inc. (NASDAQ:TREE) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
