At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.
LendingClub Corp (NYSE:LC) was in 15 hedge funds’ portfolios at the end of September. LC has seen a decrease in activity from the world’s largest hedge funds recently. There were 26 hedge funds in our database with LC positions 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 Albemarle Corporation (NYSE:ALB), Equity Lifestyle Properties, Inc. (NYSE:ELS), and Owens Corning (NYSE:OC) to gather more data points.
In the eyes of most stock holders, hedge funds are seen as unimportant, old investment vehicles of yesteryear. While there are greater than an 8000 funds trading at the moment, We look at the leaders of this club, around 700 funds. Most estimates calculate that this group of people have their hands on the lion’s share of the smart money’s total asset base, and by following their top equity investments, Insider Monkey has brought to light several investment strategies that have historically outstripped the market. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points a year for a decade in their back tests.
Keeping this in mind, we’re going to take a look at the new action regarding LendingClub Corp (NYSE:LC).
What does the smart money think about LendingClub Corp (NYSE:LC)?
At the end of the third quarter, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -42% from the second quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, David Gallo’s Valinor Management LLC has the number one position in LendingClub Corp (NYSE:LC), worth close to $190.5 million, amounting to 5% of its total 13F portfolio. On Valinor Management LLC’s heels is Blue Ridge Capital, managed by John Griffin, which holds a $55.6 million position; 0.6% of its 13F portfolio is allocated to the company. Other members of the smart money that are bullish consist of Jason Karp’s Tourbillon Capital Partners, Brian Jackelow’s SAB Capital Management and Seymour Sy Kaufman and Michael Stark’s Crosslink Capital.