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Hedge Funds Lose Interest In Lindblad Expeditions Holdings Inc (LIND)

In this article you are going to find out whether hedge funds think Lindblad Expeditions Holdings Inc (NASDAQ:LIND) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.

Lindblad Expeditions Holdings Inc (NASDAQ:LIND) shareholders have witnessed a decrease in hedge fund sentiment recently. LIND was in 16 hedge funds’ portfolios at the end of the first quarter of 2020. There were 19 hedge funds in our database with LIND positions at the end of the previous quarter. Our calculations also showed that LIND isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.

Jeff Ubben VALUEACT CAPITAL

Jeffrey Ubben of ValueAct Capital

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, blockchain technology’s influence will go beyond online payments. So, we are checking out this futurist’s moonshot opportunities in tech stocks. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s take a gander at the new hedge fund action regarding Lindblad Expeditions Holdings Inc (NASDAQ:LIND).

What does smart money think about Lindblad Expeditions Holdings Inc (NASDAQ:LIND)?

At Q1’s end, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -16% from the fourth quarter of 2019. On the other hand, there were a total of 20 hedge funds with a bullish position in LIND a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, ValueAct Capital was the largest shareholder of Lindblad Expeditions Holdings Inc (NASDAQ:LIND), with a stake worth $20.5 million reported as of the end of September. Trailing ValueAct Capital was Select Equity Group, which amassed a stake valued at $7.1 million. Deep Field Asset Management, Renaissance Technologies, and Royce & Associates 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 Headlands Capital allocated the biggest weight to Lindblad Expeditions Holdings Inc (NASDAQ:LIND), around 3.84% of its 13F portfolio. Deep Field Asset Management is also relatively very bullish on the stock, earmarking 3.37 percent of its 13F equity portfolio to LIND.

Because Lindblad Expeditions Holdings Inc (NASDAQ:LIND) has witnessed declining sentiment from the smart money, it’s safe to say that there exists a select few hedge funds that elected to cut their entire stakes by the end of the first quarter. At the top of the heap, Jack Ripsteen’s Potrero Capital Research dumped the biggest stake of the 750 funds watched by Insider Monkey, worth close to $5.7 million in stock. Israel Englander’s fund, Millennium Management, also dumped its stock, about $5.3 million worth. These transactions are important to note, as total hedge fund interest dropped by 3 funds by the end of the first quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Lindblad Expeditions Holdings Inc (NASDAQ:LIND). We will take a look at ChannelAdvisor Corp (NYSE:ECOM), Glory Star New Media Group Holdings Limited (NASDAQ:GSMG), Ciner Resources LP (NYSE:CINR), and Antero Resources Corp (NYSE:AR). This group of stocks’ market caps match LIND’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ECOM 11 27999 -1
GSMG 9 1738 -1
CINR 1 1865 -1
AR 21 51307 -4
Average 10.5 20727 -1.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $21 million. That figure was $55 million in LIND’s case. Antero Resources Corp (NYSE:AR) is the most popular stock in this table. On the other hand Ciner Resources LP (NYSE:CINR) is the least popular one with only 1 bullish hedge fund positions. Lindblad Expeditions Holdings Inc (NASDAQ:LIND) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.3% in 2020 through June 25th but still beat the market by 16.8 percentage points. Hedge funds were also right about betting on LIND as the stock returned 79.5% in Q2 (through June 25th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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