After several tireless days we have finished crunching the numbers from nearly 750 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Lincoln Educational Services Corporation (NASDAQ:LINC).
Lincoln Educational Services Corporation (NASDAQ:LINC) has experienced a decrease in hedge fund sentiment of late. LINC was in 4 hedge funds’ portfolios at the end of the third quarter of 2019. There were 5 hedge funds in our database with LINC positions at the end of the previous quarter. Our calculations also showed that LINC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most stock holders, hedge funds are seen as slow, outdated investment vehicles of years past. While there are over 8000 funds with their doors open at present, Our researchers look at the crème de la crème of this group, about 750 funds. It is estimated that this group of investors direct most of all hedge funds’ total asset base, and by tailing their first-class equity investments, Insider Monkey has unsheathed numerous investment strategies that have historically beaten the market. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points per annum since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock already gained 20 percent. Keeping this in mind let’s go over the key hedge fund action surrounding Lincoln Educational Services Corporation (NASDAQ:LINC).
What have hedge funds been doing with Lincoln Educational Services Corporation (NASDAQ:LINC)?
At Q3’s end, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -20% from the second quarter of 2019. On the other hand, there were a total of 5 hedge funds with a bullish position in LINC a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Wilmot B. Harkey and Daniel Mack’s Nantahala Capital Management has the most valuable position in Lincoln Educational Services Corporation (NASDAQ:LINC), worth close to $5.1 million, accounting for 0.2% of its total 13F portfolio. Coming in second is Anand Parekh of Alyeska Investment Group, with a $4.9 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors with similar optimism comprise Renaissance Technologies, Phil Frohlich’s Prescott Group Capital Management and . In terms of the portfolio weights assigned to each position Prescott Group Capital Management allocated the biggest weight to Lincoln Educational Services Corporation (NASDAQ:LINC), around 0.38% of its 13F portfolio. Nantahala Capital Management is also relatively very bullish on the stock, dishing out 0.19 percent of its 13F equity portfolio to LINC.
Due to the fact that Lincoln Educational Services Corporation (NASDAQ:LINC) has faced declining sentiment from the aggregate hedge fund industry, it’s safe to say that there exists a select few hedgies who were dropping their entire stakes last quarter. Intriguingly, Donald Sussman’s Paloma Partners sold off the biggest investment of the “upper crust” of funds followed by Insider Monkey, totaling close to $0 million in stock. Ken Griffin’s fund, Citadel Investment Group, also dropped its stock, about $0 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 1 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Lincoln Educational Services Corporation (NASDAQ:LINC). We will take a look at Ascena Retail Group Inc (NASDAQ:ASNA), Vermillion, Inc. (NASDAQ:VRML), Teligent, Inc. (NASDAQ:TLGT), and Wheeler Real Estate Investment Trust, Inc. (NASDAQ:WHLRD). This group of stocks’ market caps are similar to LINC’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.5 hedge funds with bullish positions and the average amount invested in these stocks was $9 million. That figure was $13 million in LINC’s case. Ascena Retail Group Inc (NASDAQ:ASNA) is the most popular stock in this table. On the other hand Wheeler Real Estate Investment Trust, Inc. (NASDAQ:WHLRD) is the least popular one with only 3 bullish hedge fund positions. Lincoln Educational Services Corporation (NASDAQ:LINC) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately LINC wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); LINC investors were disappointed as the stock returned -15.9% during the first two months of the fourth quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.