The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 817 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider Lightinthebox Holding Co Ltd (NYSE:LITB) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Lightinthebox Holding Co Ltd (NYSE:LITB) has experienced an increase in activity from the world’s largest hedge funds in recent months. Lightinthebox Holding Co Ltd (NYSE:LITB) was in 3 hedge funds’ portfolios at the end of September. The all time high for this statistics is 3. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 2 hedge funds in our database with LITB positions at the end of the second quarter. Our calculations also showed that LITB isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Paul Marshall of Marshall Wace
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 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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. With all of this in mind we’re going to check out the recent hedge fund action encompassing Lightinthebox Holding Co Ltd (NYSE:LITB).
What have hedge funds been doing with Lightinthebox Holding Co Ltd (NYSE:LITB)?
At Q3’s end, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 50% from the second quarter of 2020. On the other hand, there were a total of 2 hedge funds with a bullish position in LITB a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Renaissance Technologies, holds the number one position in Lightinthebox Holding Co Ltd (NYSE:LITB). Renaissance Technologies has a $2.5 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Marshall Wace LLP, managed by Paul Marshall and Ian Wace, which holds a $1.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. In terms of the portfolio weights assigned to each position Marshall Wace LLP allocated the biggest weight to Lightinthebox Holding Co Ltd (NYSE:LITB), around 0.01% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, designating 0.0025 percent of its 13F equity portfolio to LITB.
With a general bullishness amongst the heavyweights, specific money managers were breaking ground themselves. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, established the largest position in Lightinthebox Holding Co Ltd (NYSE:LITB). Marshall Wace LLP had $1.1 million invested in the company at the end of the quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Lightinthebox Holding Co Ltd (NYSE:LITB) but similarly valued. We will take a look at Ideanomics, Inc. (NASDAQ:IDEX), Southern Missouri Bancorp, Inc. (NASDAQ:SMBC), CapStar Financial Holdings, Inc. (NASDAQ:CSTR), Greenhill & Co., Inc. (NYSE:GHL), Pure Cycle Corporation (NASDAQ:PCYO), Hersha Hospitality Trust (NYSE:HT), and LogicBio Therapeutics, Inc. (NASDAQ:LOGC). This group of stocks’ market caps are similar to LITB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| IDEX | 3 | 264 | -5 |
| SMBC | 4 | 7159 | 1 |
| CSTR | 6 | 10020 | -1 |
| GHL | 9 | 15174 | -4 |
| PCYO | 11 | 56424 | -3 |
| HT | 12 | 13849 | 0 |
| LOGC | 4 | 70426 | 0 |
| Average | 7 | 24759 | -1.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $25 million. That figure was $4 million in LITB’s case. Hersha Hospitality Trust (NYSE:HT) is the most popular stock in this table. On the other hand Ideanomics, Inc. (NASDAQ:IDEX) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Lightinthebox Holding Co Ltd (NYSE:LITB) is even less popular than IDEX. Our overall hedge fund sentiment score for LITB is 36. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Hedge funds clearly dropped the ball on LITB as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 28.1% in 2020 through November 23rd and still beat the market by 15.4 percentage points. A small number of hedge funds were also right about betting on LITB as the stock returned 60.6% since Q3 (through November 23rd) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
