Should You Follow This Investor Into His Top Small-Cap Picks?

In Lifelock Inc (NYSE:LOCK), P.A.W. reported holding 325,000 shares, up by 125,000 shares over the quarter; the value of the stake amounted to $2.85 million. Similar to Allot, the investor increased its stake amid a 47% drop registered by the stock during the third quarter. It seems to have been the right call, as Lifelock Inc (NYSE:LOCK)’s stock surged by over 40% a week ago, after the company reported better-than-expected financial results and announced a settlement with the Federal Trade Commission (see more details here). The stock is still down by 22% since the beginning of the year and trades at around 19-times forward earnings. Billionaire Ken Fisher‘s Fisher Asset Management is also bullish on Lifelock Inc (NYSE:LOCK), owning 335,998 shares as of September 30.

Lendingtree Inc (NASDAQ:TREE) is Wright’s top financial pick as P.A.W. disclosed a $2.79 million stake in the company that contains 30,000 shares, down by 25% on the quarter. Lendingtree operates an online loan marketplace for consumers, connecting them with lenders and providing other credit-based services. The stock has more than doubled since the beginning of the year and sports a rather high forward P/E of 34.x. Currently, Lendingtree Inc (NASDAQ:TREE) is planning to raise more capital by selling 725,000 shares. At the end of October, Needham & Company and BWS Financial reaffirmed their ‘Buy’ ratings on the stock and raised their price targets to $140 and $150 respectively. However, Lendingtree Inc (NASDAQ:TREE) is not very popular among the funds that we track, with only 18 of them holding shares of the company at the end of June. In addition, Clifford Fox’s Columbus Circle Investors reported holding 111,000 shares of the company in the current round of 13F filings.

Virtusa Corporation (NASDAQ:VRTU) represents P.A.W.’s fifth-largest holding, the fund owning 48,000 shares worth $2.46 million as of the end of September. The company provides IT services and its shares have gained over 33% since the start of 2015. Just yesterday Virtusa Corporation (NASDAQ:VRTU) reported its financial results for the second quarter of its fiscal year 2016, delivering EPS of $0.50 and revenue of $143 million, beating analyst estimates of $0.34 in EPS and $142 million in revenue. Billionaire quant fund Renaissance Technologies, managed by Jim Simons, was another shareholder of Virtusa Corporation (NASDAQ:VRTU) at the end of the second quarter, with a stake of 63,800 shares.

Disclosure: None