Headwaters Capital recently released its Q1 2021 Investor Letter, a copy of which you can download here. The fund posted a return of 0.4% for the quarter, underperforming its benchmark, the Russell Mid Cap Index which returned 8.1% in the same quarter. You should check out Headwaters Capital’s top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.
In the Q4 2020 Investor Letter, the fund highlighted a few stocks and LendingTree Inc. (NASDAQ:TREE) is one of them. LendingTree Inc. (NASDAQ:TREE) is an online lending marketplace. In the last three months, LendingTree Inc. (NASDAQ:TREE) stocklost 10.5% and on April 6th it had a closing price of $217.64. Here is what the fund said:
“LendingTree is an online marketplace for consumer financial products such as mortgages, credit cards, personal loans and insurance. TREE’s marketplaces connect consumers looking for financial products with lenders and insurance companies, effectively serving as an outsourced marketing partner for lenders and insurance providers. TREE’s results were negatively impacted by ongoing stimulus payments that have served to improve the health of consumer balance sheets and reduce the demand for lending products, specifically credit cards and personal loans. As a result of lower consumer demand for loans, lenders have reined in their marketing budgets, which has translated into lower revenue for TREE. While it is difficult to predict when consumer demand and, consequently, lender marketing budgets will rebound, I do expect both to rebound to pre-COVID levels. Additionally, TREE’s CEO is heavily incentivized to improve performance at the business: he has foregone a salary and has instead accepted a performance-based options grant that can only be exercised once the stock price reaches a minimum hurdle price of $432 (+108% from the current share price). The CEO also has a 16% ownership stake in the Company.”
In Q3 2020, the number of bullish hedge fund positions on LendingTree Inc. (NASDAQ:TREE) stock increased by about 33% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in TREE’s growth potential. Our calculations showed that LendingTree Inc. (NASDAQ:TREE) isn’t ranked among the 30 most popular stocks among hedge funds.
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 scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best innovative stocks to buy 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 website:
Disclosure: None. This article is originally published at Insider Monkey.