In this article you are going to find out whether hedge funds think Southern Missouri Bancorp, Inc. (NASDAQ:SMBC) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Is Southern Missouri Bancorp, Inc. (NASDAQ:SMBC) an outstanding stock to buy now? Investors who are in the know are reducing their bets on the stock. The number of bullish hedge fund bets retreated by 1 lately. Our calculations also showed that SMBC isn’t among the 30 most popular stocks among hedge funds (click for Q1 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.
In the financial world there are tons of indicators market participants put to use to grade publicly traded companies. Some of the most under-the-radar indicators are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the top picks of the best fund managers can outclass their index-focused peers by a superb amount (see the details here).
Roger Ibbotson of Zebra Capital Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. We interview hedge fund managers and ask them about their best ideas. You can watch our latest hedge fund manager interview here and find out the name of the large-cap healthcare stock that Sio Capital’s Michael Castor expects to double. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s check out the new hedge fund action surrounding Southern Missouri Bancorp, Inc. (NASDAQ:SMBC).
What have hedge funds been doing with Southern Missouri Bancorp, Inc. (NASDAQ:SMBC)?
At Q1’s end, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -25% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards SMBC over the last 18 quarters. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Chuck Royce’s Royce & Associates has the largest position in Southern Missouri Bancorp, Inc. (NASDAQ:SMBC), worth close to $7.1 million, comprising 0.1% of its total 13F portfolio. The second most bullish fund manager is Renaissance Technologies, holding a $3.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. In terms of the portfolio weights assigned to each position Royce & Associates allocated the biggest weight to Southern Missouri Bancorp, Inc. (NASDAQ:SMBC), around 0.1% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, earmarking 0.0037 percent of its 13F equity portfolio to SMBC.
Due to the fact that Southern Missouri Bancorp, Inc. (NASDAQ:SMBC) has faced bearish sentiment from the entirety of the hedge funds we track, logic holds that there lies a certain “tier” of fund managers that elected to cut their entire stakes by the end of the third quarter. Intriguingly, Israel Englander’s Millennium Management dumped the largest position of the “upper crust” of funds monitored by Insider Monkey, valued at close to $0.3 million in stock. Roger Ibbotson’s fund, Zebra Capital Management, also sold off its stock, about $0.2 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 1 funds by the end of the third quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Southern Missouri Bancorp, Inc. (NASDAQ:SMBC) but similarly valued. These stocks are DXP Enterprises Inc (NASDAQ:DXPE), Intelsat S.A. (NYSE:I), CURO Group Holdings Corp. (NYSE:CURO), and Ideanomics, Inc. (NASDAQ:IDEX). This group of stocks’ market values are similar to SMBC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DXPE | 7 | 25787 | -2 |
| I | 23 | 73314 | -26 |
| CURO | 14 | 24996 | -4 |
| IDEX | 3 | 761 | 1 |
| Average | 11.75 | 31215 | -7.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.75 hedge funds with bullish positions and the average amount invested in these stocks was $31 million. That figure was $11 million in SMBC’s case. Intelsat S.A. (NYSE:I) is the most popular stock in this table. On the other hand Ideanomics, Inc. (NASDAQ:IDEX) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Southern Missouri Bancorp, Inc. (NASDAQ:SMBC) is even less popular than IDEX. Hedge funds dodged a bullet by taking a bearish stance towards SMBC. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 7.9% in 2020 through May 22nd but managed to beat the market by 15.6 percentage points. Unfortunately SMBC wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); SMBC investors were disappointed as the stock returned -7.6% during the second quarter (through May 22nd) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
Disclosure: None. This article was originally published at Insider Monkey.
