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Here is What Hedge Funds Think About Fidelity Southern Corporation (LION)

At Insider Monkey we follow around 730 of the best-performing investors and even though many of them lost money in the last several months, the history teaches us that over the long-run they still manage to beat the market, which is why it can be profitable for us to imitate their activity. Of course, even the best money managers can sometimes get it wrong, but following some of their picks gives us a better chance to outperform the crowd than picking a random stock and this is where our research comes in.

Fidelity Southern Corporation (NASDAQ:LION) investors should pay attention to a decrease in activity from the world’s largest hedge funds lately. LION was in 16 hedge funds’ portfolios at the end of September. There were 17 hedge funds in our database with LION holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Vanda Pharmaceuticals Inc. (NASDAQ:VNDA), K12 Inc. (NYSE:LRN), and Computer Programs & Systems, Inc. (NASDAQ:CPSI) to gather more data points.

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If you’d ask most investors, hedge funds are viewed as worthless, old investment vehicles of yesteryear. While there are greater than 8000 funds trading at the moment, We look at the bigwigs of this club, about 700 funds. These investment experts handle most of all hedge funds’ total capital, and by monitoring their inimitable investments, Insider Monkey has discovered a number of investment strategies that have historically outperformed the market. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points per year for a decade in their back tests.

With all of this in mind, let’s take a look at the new action surrounding Fidelity Southern Corporation (NASDAQ:LION).

What does the smart money think about Fidelity Southern Corporation (NASDAQ:LION)?

At the Q3’s end, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a drop of 6% from one quarter earlier. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Mark Lee’s Forest Hill Capital has the biggest position in Fidelity Southern Corporation (NASDAQ:LION), worth close to $20 million, comprising 1.9% of its total 13F portfolio. On Forest Hill Capital’s heels is Jim Simons’ Renaissance Technologies, which holds a $10.6 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Other professional money managers that hold long positions comprise Chuck Royce’s Royce & Associates, Anton Schutz’s Mendon Capital Advisors and Ken Gray and Steve Walsh’s Bryn Mawr Capital.

Seeing as Fidelity Southern Corporation (NASDAQ:LION) has experienced falling interest from the entirety of the hedge funds we track, it’s safe to say that there was a specific group of money managers who sold off their entire stakes in the third quarter. Intriguingly, Emanuel J. Friedman’s EJF Capital dumped the largest investment of the 700 funds monitored by Insider Monkey, worth about $8.7 million in stock, and Matthew Lindenbaum’s Basswood Capital was right behind this move, as the fund dumped about $3 million worth of shares. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 1 fund in the third quarter.

Let’s now review hedge fund activity in other stocks similar to Fidelity Southern Corporation (NASDAQ:LION). These stocks are Vanda Pharmaceuticals Inc. (NASDAQ:VNDA), K12 Inc. (NYSE:LRN), Computer Programs & Systems, Inc. (NASDAQ:CPSI), and AngioDynamics, Inc. (NASDAQ:ANGO). This group of stocks’ market caps match LION’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
VNDA 23 280983 -2
LRN 19 59060 1
CPSI 8 12790 -3
ANGO 16 99558 1

As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $113 million. That figure was just $53 million in LION’s case. Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) is the most popular stock in this table. On the other hand Computer Programs & Systems, Inc. (NASDAQ:CPSI) is the least popular one with only 8 bullish hedge fund positions. Fidelity Southern Corporation (NASDAQ:LION) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard VNDA might be a better candidate to consider a long position.

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