Is Lindblad Expeditions Holdings Inc (LIND) Going to Burn These Hedge Funds?

At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (see why hell is coming). We reversed our stance on March 25th after seeing unprecedented fiscal and monetary stimulus unleashed by the Fed and the Congress. This is the perfect market for stock pickers, now that the stocks are fully valued again. In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Lindblad Expeditions Holdings Inc (NASDAQ:LIND) at the end of the second quarter and determine whether the smart money was really smart about this stock.

Lindblad Expeditions Holdings Inc (NASDAQ:LIND) was in 18 hedge funds’ portfolios at the end of June. The all time high for this statistics is 20. LIND shareholders have witnessed an increase in hedge fund sentiment recently. There were 16 hedge funds in our database with LIND holdings at the end of March. Our calculations also showed that LIND isn’t among the 30 most popular stocks among hedge funds (click for Q2 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.

If you’d ask most shareholders, hedge funds are viewed as unimportant, old investment vehicles of yesteryear. While there are more than 8000 funds with their doors open at present, Our researchers choose to focus on the bigwigs of this club, approximately 850 funds. These investment experts direct the majority of the smart money’s total asset base, and by shadowing their finest stock picks, Insider Monkey has formulated various investment strategies that have historically surpassed Mr. Market. Insider Monkey’s flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 34% since February 2017 (through August 17th) even though the market was up 53% during the same period. We just shared a list of 8 short targets in our latest quarterly update .


Jeffrey Ubben of ValueAct Capital

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 are checking out this junior gold mining stock and 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 to get excerpts of these letters in your inbox. With all of this in mind we’re going to go over the latest hedge fund action encompassing Lindblad Expeditions Holdings Inc (NASDAQ:LIND).

What does smart money think about Lindblad Expeditions Holdings Inc (NASDAQ:LIND)?

At second quarter’s end, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from the previous quarter. By comparison, 15 hedge funds held shares or bullish call options in LIND a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their stakes significantly (or already accumulated large positions).

More specifically, ValueAct Capital was the largest shareholder of Lindblad Expeditions Holdings Inc (NASDAQ:LIND), with a stake worth $38 million reported as of the end of September. Trailing ValueAct Capital was Select Equity Group, which amassed a stake valued at $13.3 million. Deep Field Asset Management, Royce & Associates, and Lionstone Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Deep Field Asset Management allocated the biggest weight to Lindblad Expeditions Holdings Inc (NASDAQ:LIND), around 6.21% of its 13F portfolio. Rutabaga Capital Management is also relatively very bullish on the stock, setting aside 2.43 percent of its 13F equity portfolio to LIND.

As aggregate interest increased, key money managers were breaking ground themselves. Lionstone Capital Management, managed by Leon Lowenstein, created the most outsized position in Lindblad Expeditions Holdings Inc (NASDAQ:LIND). Lionstone Capital Management had $4.8 million invested in the company at the end of the quarter. Constantinos J. Christofilis’s Archon Capital Management also made a $1.8 million investment in the stock during the quarter. The other funds with brand new LIND positions are Israel Englander’s Millennium Management, James Thomas Berylson’s Berylson Capital Partners, and Thyra Zerhusen’s Fairpointe Capital.

Let’s check out hedge fund activity in other stocks similar to Lindblad Expeditions Holdings Inc (NASDAQ:LIND). We will take a look at IDEAYA Biosciences, Inc. (NASDAQ:IDYA), Central Puerto S.A. (NYSE:CEPU), Waterstone Financial, Inc. (NASDAQ:WSBF), Franklin Financial Network Inc (NYSE:FSB), Gravity Co., LTD. (NASDAQ:GRVY), AngioDynamics, Inc. (NASDAQ:ANGO), and Yiren Digital Ltd. (NYSE:YRD). This group of stocks’ market caps resemble LIND’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
IDYA 12 72953 6
CEPU 4 5834 -2
WSBF 14 64527 2
FSB 8 12985 4
GRVY 4 3283 0
ANGO 10 23989 -1
YRD 1 2100 -1
Average 7.6 26524 1.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 7.6 hedge funds with bullish positions and the average amount invested in these stocks was $27 million. That figure was $96 million in LIND’s case. Waterstone Financial, Inc. (NASDAQ:WSBF) is the most popular stock in this table. On the other hand Yiren Digital Ltd. (NYSE:YRD) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Lindblad Expeditions Holdings Inc (NASDAQ:LIND) is more popular among hedge funds. Our overall hedge fund sentiment score for LIND is 84. 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. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 24.8% in 2020 through the end of September and still managed to beat the market by 19.3 percentage points. Hedge funds were also right about betting on LIND, though not to the same extent, as the stock returned 10.2% in the third quarter and outperformed the market as well.

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