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Did Hedge Funds Drop The Ball On Hamilton Lane Incorporated (HLNE)?

Like everyone else, elite investors make mistakes. Some of their top consensus picks, such as Amazon, Facebook and Alibaba, have not done well in Q4 due to various reasons. Nevertheless, the data show elite investors’ consensus picks have done well on average over the long-term. The top 20 stocks among hedge funds beat the S&P 500 Index ETF by more than 6 percentage points so far this year. Because their consensus picks have done well, we pay attention to what elite funds think before doing extensive research on a stock. In this article, we take a closer look at Hamilton Lane Incorporated (NASDAQ:HLNE) from the perspective of those elite funds.

Is Hamilton Lane Incorporated (NASDAQ:HLNE) a bargain? The smart money is in an optimistic mood. The number of long hedge fund positions advanced by 1 lately. Our calculations also showed that HLNE isn’t among the 30 most popular stocks among hedge funds.

Today there are a multitude of methods stock traders use to size up their stock investments. A couple of the less utilized methods are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the top picks of the top investment managers can outperform the broader indices by a very impressive amount (see the details here).

Chuck Royce

We’re going to take a peek at the latest hedge fund action encompassing Hamilton Lane Incorporated (NASDAQ:HLNE).

What does smart money think about Hamilton Lane Incorporated (NASDAQ:HLNE)?

At Q1’s end, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 11% from the previous quarter. By comparison, 13 hedge funds held shares or bullish call options in HLNE a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

HLNE_june2019

More specifically, Renaissance Technologies was the largest shareholder of Hamilton Lane Incorporated (NASDAQ:HLNE), with a stake worth $34.4 million reported as of the end of March. Trailing Renaissance Technologies was Citadel Investment Group, which amassed a stake valued at $10.9 million. Royce & Associates, Two Sigma Advisors, and HBK Investments were also very fond of the stock, giving the stock large weights in their portfolios.

Now, specific money managers were breaking ground themselves. HBK Investments, managed by David Costen Haley, assembled the most outsized position in Hamilton Lane Incorporated (NASDAQ:HLNE). HBK Investments had $1 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also made a $1 million investment in the stock during the quarter. The only other fund with a new position in the stock is Michael Platt and William Reeves’s BlueCrest Capital Mgmt..

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Hamilton Lane Incorporated (NASDAQ:HLNE) but similarly valued. We will take a look at Independent Bank Group Inc (NASDAQ:IBTX), Uniqure NV (NASDAQ:QURE), Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (NASDAQ:OMAB), and Yext, Inc. (NYSE:YEXT). This group of stocks’ market valuations match HLNE’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
IBTX 10 127668 -3
QURE 28 529925 11
OMAB 6 55473 1
YEXT 23 203477 10
Average 16.75 229136 4.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 16.75 hedge funds with bullish positions and the average amount invested in these stocks was $229 million. That figure was $55 million in HLNE’s case. Uniqure NV (NASDAQ:QURE) is the most popular stock in this table. On the other hand Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (NASDAQ:OMAB) is the least popular one with only 6 bullish hedge fund positions. Hamilton Lane Incorporated (NASDAQ:HLNE) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on HLNE as the stock returned 30.2% during the same time frame and outperformed the market by an even larger margin.

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

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