Insider Monkey finished processing more than 700 13F filings made by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30. In this article we are going to take a look at smart money sentiment towards Preferred Bank (NASDAQ:PFBC).
Is Preferred Bank (NASDAQ:PFBC) a great investment right now? Hedge funds are becoming more confident. The number of bullish hedge fund bets increased by 1 lately. PFBC was in 10 hedge funds’ portfolios at the end of the third quarter of 2015. There were 9 hedge funds in our database with PFBC positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as YRC Worldwide, Inc. (NASDAQ:YRCW), Eclipse Resources Corp (NYSE:ECR), and SunCoke Energy Partners LP (NYSE:SXCP) to gather more data points.
According to most traders, hedge funds are assumed to be underperforming, old investment tools of years past. While there are more than an 8000 funds trading today, Our experts look at the upper echelon of this club, around 700 funds. These money managers have their hands on the majority of the smart money’s total asset base, and by observing their highest performing equity investments, Insider Monkey has determined a number of investment strategies that have historically outstripped the market. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points per annum for a decade in their back tests.
Now, let’s take a glance at the latest action regarding Preferred Bank (NASDAQ:PFBC).
What have hedge funds been doing with Preferred Bank (NASDAQ:PFBC)?
At the Q3’s end, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Basswood Capital, managed by Matthew Lindenbaum, holds the most valuable position in Preferred Bank (NASDAQ:PFBC). Basswood Capital has a $24.2 million position in the stock, comprising 1.2% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies holding a $11.5 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors that are bullish consist of Fred Cummings’s Elizabeth Park Capital Management, Israel Englander’s Millennium Management and John Overdeck and David Siegel’s Two Sigma Advisors.
Now, some big names were breaking ground themselves. Springbok Capital, managed by Gavin Saitowitz and Cisco J. del Valle, established the biggest position in Preferred Bank (NASDAQ:PFBC). Springbok Capital had $0.1 million invested in the company at the end of the quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Preferred Bank (NASDAQ:PFBC) but similarly valued. We will take a look at YRC Worldwide, Inc. (NASDAQ:YRCW), Eclipse Resources Corp (NYSE:ECR), SunCoke Energy Partners LP (NYSE:SXCP), and Imprivata Inc (NYSE:IMPR). All of these stocks’ market caps are similar to PFBC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| YRCW | 27 | 213738 | 9 |
| ECR | 10 | 25829 | -1 |
| SXCP | 5 | 8890 | -6 |
| IMPR | 15 | 97958 | 0 |
As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $87 million. That figure was $51 million in PFBC’s case. YRC Worldwide, Inc. (NASDAQ:YRCW) is the most popular stock in this table. On the other hand SunCoke Energy Partners LP (NYSE:SXCP) is the least popular one with only 5 bullish hedge fund positions. Preferred Bank (NASDAQ:PFBC) is not the least popular stock in this grou,p but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard YRCW might be a better candidate to consider a long position.
