LendingClub Followup

“Finding investments is easy, waiting is hard, waiting is the hardest part”

-Clay Baker



​​The Portfolio Performance

The portfolio is up 5.94% YTD



LendingClub Followup

This morning, analysts at Wedbush issued a note recommending LendingClub. Their note follows some of the same topics I discussed in my first buy and certainly most of my own thinking on the company. The stock is up almost 7% this morning on the Wedbush note.


I'll also note that Cathie Wood's ARK Investment Management fund owns 2,888,278 shares at an average price of $38.80. ARK sold over 4 million shares for portfolio management, but still owns 2.9% of the stock. However, ARK's position in LC represents just 0.19% of the portfolio. ARK has a 5-year outlook on investments and trades daily around their positions to manage position sizes. ARK is a liquidity fund, so they will trim leaders and feed losers that they have strong conviction in. To that point, ARK's ownership should not be a vote of confidence until ARK buys more shares. ARK first bought LC in Q4 2016, the information above was reported in November 2021.


Wedbush Note

06:43 AM EST, 12/22/2021 (MT Newswires) -- LendingClub's (LC) relatively strong credit quality in comparison with peers, reasonable valuation, and high expected growth are the main factors that have driven its outperform stock rating at Wedbush, according to a research note late Tuesday.The company is trading at 9.2x Wedbush' 2023 estimate, which, analysts including David Chiaverini said, is a discount to mid-cap banks at 10.4x and neobank/fintech peers at 27.4x.Although delinquencies are increasing industry-wide, LendingClub's "strong underwriting and borrower demographics should lead to better loss rates versus peers," Chiaverini said in the note.

The analysts pointed out the company said during investor meetings last week that delinquency trends "remain within expectations and are not spiking to the same degree as peers."

"The analysts, who are of the view that Radius Bank acquisition was a game-changer, added LendingClub seeks to disrupt the nearly $1 trillion US credit card market by offering a "more affordable personal credit product."Shares of LendingClub closed at $24.19 Tuesday. Wedbush has a 12-month price target of $40 for the company.Price: 24.51, Change: +0.32, Percent Change: +1.32


Standing Note to My Subscribers

I'm going to leave this note in place until I take action so that I will have clearly telegraphed what I'm planning to do. Within the portfolio I'm looking at selling the (GLD) gold position and the iShares Clean Energy Fund (ICLN). We have enough cash in the portfolio that I don't need to sell those positions yet, but neither one of them is doing what they are suppose to do for the portfolio. The ICLN was intended to provide global exposure to clean energy, where the CNRG is providing mostly US based exposure to clean energy. The CNRG is clearly proving to be the better stock to own. The GLD was added long ago as a hedge against all uncertainty. The stock market seems to be going through a change, where gold is not long considered the safe haven asset. Bitcoin might be replacing gold, bond market proxy stocks, or high quality/high dividend stocks may be taking over that role. I'm watching those positions carefully and thinking about where that money could be better deployed.



"Markets don't go to zero, Portfolio's do.

Buy quality, be patient...and look twice for motorcycles."

- Clay Baker

Stay Invested,

Clay Baker

ENTER YOUR NAME & EMAIL ADDRESS TO SUBSCRIBE

SUBSCRIBE HERE

Keep Me Honest 2021

  1. The S&P 500 will achieve year-end earnings of $170-$175 (1-1-2021).

  2. We are likely to have a significant pull-back during the 1st quarter, about 5%-10% (1-1-2021).

  3. Stock picking will outperform algorithmic trading again as it did in 2020 (1-1-2021).

  4. S&P 500 will reach 5,000 by year-end.

Clay's Rules

Rule #1: Don't lose money

Rule #2: See Rule #1

Rule #3: Portfolios go to zero, markets don't, Stay Invested

Rule #4: When good stocks you own drop 10% below your cost basis, add shares

Rule #5: Bull markets aren't sustained without the Transports

Rule #6: When Forward P/E is lower than TTM P/E, expect earnings to increase

Rule #7: When an investment bank sells below book value, buy it

Rule #8: Tips are for waiters. Do your own homework.

Rule #9: Don't sell a stock because you're bored with it. Do your own homework.

RULE #10: Being early and being late is the same as being wrong...move on.

Rule #11: Investing is easy. Waiting is hard, waiting is the hardest part.

Disclosure: I am personally invested long in some or all of these stocks or funds that appear in the Stay Invested portfolio and may purchase or sell shares within the next 72 hours. I am also invested in other stocks and funds that do not appear in the Stay Invested portfolio but may be mentioned or related to this article. It is not my intention to advise or encourage the purchase or sale of any security. I am invested long in these securities mentioned in this post:

AMD, AMRN, AMZN, AAPL, ARKK, ARKG, CNRG, ENPH, FB, GNRC, GBTC, GLD, HRTX, HD, IPOD, MSFT, NVDA, PSTH, TWLO, VBIV

I am invested short in these securities mentioned in this post: