Here’s Why LendingTree Inc. (TREE) Landed in Bernzott Capital’s Detractor List

Bernzott Capital Advisors, an investment management firm, published its first quarter 2021 investor letter – a copy of which can be downloaded here. A net return of 10.27% was recorded by the fund for the Q1 of 2021, below the Russell 2000 Value and Russell 2500 Value Index that delivered a 21.17% and 16.83% returns respectively for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Bernzott Capital Advisors, in their Q1 2021 investor letter, mentioned LendingTree, Inc. (NASDAQ: TREE), and shared their insights on the company. LendingTree, Inc. is a Charlotte, North Carolina-based online lending marketplace that currently has a $2.5 billion market capitalization. Since the beginning of the year, TREE delivered a -29.44% return, while its 12-month gains are down by -16.06%. As of May 05, 2021, the stock closed at $193.19 per share.

Here is what Bernzott Capital Advisors has to say about LendingTree, Inc. in their Q1 2021 investor letter:

“LendingTree (TREE): A good fourth quarter earnings report and above-consensus revenue outlook for 2021’s first quarter were both overshadowed by lower-than-expected profit margins for the first quarter as the company steps up investments, including for customer acquisition in its mortgage business. Its insurance business posted continued good results, and consumer improved sequentially and appears to have bottomed following negative COVID-19 and stimulus impacts.”


Our calculations show that LendingTree, Inc. (NASDAQ: TREE) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, LendingTree, Inc. was in 26 hedge fund portfolios, compared to 20 funds in the third quarter. TREE delivered a -42.35% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage:

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