At Insider Monkey, we pore over the filings of more than 700 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not Guaranty Bancorp (NASDAQ:GBNK) makes for a good investment right now.
The stock of Guaranty Bancorp, a small-cap bank holding company, has gained 10% since the beginning of the year, but at the same time it witnessed a slight decrease in activity from the world’s largest hedge funds in recent months. GBNK was in 10 hedge funds’ portfolios at the end of September. There were 11 hedge funds in our database with GBNK positions at the end of the previous quarter. At the end of this article we will also compare GBNK to other stocks, including Financial Institutions, Inc. (NASDAQ:FISI), Dynex Capital Inc (NYSE:DX), and Boulevard Acquisition Corp II (NASDAQ:BLVDU) to get a better sense of its popularity.
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If you’d ask most investors, hedge funds are viewed as slow, old financial tools of years past. While there are more than 8000 funds with their doors open at the moment, Our experts choose to focus on the upper echelon of this group, about 700 funds. Most estimates calculate that this group of people administer the majority of the hedge fund industry’s total asset base, and by keeping an eye on their highest performing investments, Insider Monkey has determined various investment strategies that have historically outrun the market. Insider Monkey’s small-cap hedge fund strategy outpaced the S&P 500 index by 12 percentage points annually for a decade in their back tests.
With all of this in mind, we’re going to take a peek at the recent action surrounding Guaranty Bancorp (NASDAQ:GBNK).
Hedge fund activity in Guaranty Bancorp (NASDAQ:GBNK)
At the end of the third quarter, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, down by 9% over the quarter. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Basswood Capital, managed by Matthew Lindenbaum, holds the most valuable position in Guaranty Bancorp (NASDAQ:GBNK). Basswood Capital has a $22.5 million position in the stock, comprising 1.1% of its 13F portfolio. The second largest stake is held by Forest Hill Capital, managed by Mark Lee, which holds a $19.3 million position; the fund has 1.8% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish comprise Fred Cummings’ Elizabeth Park Capital Management, Chuck Royce’s Royce & Associates, and Jim Simons’ Renaissance Technologies.
Since Guaranty Bancorp (NASDAQ:GBNK) has experienced a declining sentiment from hedge fund managers, it’s safe to say that there exists a select few funds that slashed their entire stakes heading into Q4. Intriguingly, Ken Gray and Steve Walsh’s Bryn Mawr Capital said goodbye to the biggest investment of all the hedgies monitored by Insider Monkey, totaling about $0.7 million in stock.
Let’s now take a look at hedge fund activity in other stocks similar to Guaranty Bancorp (NASDAQ:GBNK). We will take a look at Financial Institutions, Inc. (NASDAQ:FISI), Dynex Capital Inc (NYSE:DX), Boulevard Acquisition Corp II (NASDAQ:BLVDU), and Nobilis Health Corp (NYSEMKT:HLTH). All of these stocks’ market caps are similar to GBNK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FISI | 6 | 8866 | 1 |
| DX | 5 | 4933 | 1 |
| BLVDU | 18 | 176802 | -4 |
| HLTH | 6 | 5638 | 1 |
As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $49 million, lower than the $65 million in GBNK’s case. Boulevard Acquisition Corp II (NASDAQ:BLVDU) is the most popular stock in this table. On the other hand Dynex Capital Inc (NYSE:DX) is the least popular one with only 5 bullish hedge fund positions. Guaranty Bancorp (NASDAQ:GBNK) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard BLVDU might be a better candidate to consider a long position.
