Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about First Hawaiian, Inc. (NASDAQ:FHB) in this article.
Is First Hawaiian, Inc. (NASDAQ:FHB) a buy here? Prominent investors were taking an optimistic view. The number of bullish hedge fund positions rose by 5 lately. First Hawaiian, Inc. (NASDAQ:FHB) was in 19 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 28. Our calculations also showed that FHB isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
To the average investor there are plenty of methods stock market investors have at their disposal to size up stocks. A duo of the best methods are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the best picks of the top hedge fund managers can outpace the market by a superb amount (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Ryan Tolkin, CIO of Schonfeld Strategic Advisors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we’re going to analyze the key hedge fund action regarding First Hawaiian, Inc. (NASDAQ:FHB).
Do Hedge Funds Think FHB Is A Good Stock To Buy Now?
At first quarter’s end, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 36% from the fourth quarter of 2020. By comparison, 21 hedge funds held shares or bullish call options in FHB a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Yacktman Asset Management held the most valuable stake in First Hawaiian, Inc. (NASDAQ:FHB), which was worth $80.7 million at the end of the fourth quarter. On the second spot was Royce & Associates which amassed $34.3 million worth of shares. GLG Partners, Citadel Investment Group, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Yacktman Asset Management allocated the biggest weight to First Hawaiian, Inc. (NASDAQ:FHB), around 0.84% of its 13F portfolio. Gillson Capital is also relatively very bullish on the stock, dishing out 0.54 percent of its 13F equity portfolio to FHB.
Consequently, key hedge funds have been driving this bullishness. Gillson Capital, managed by Daniel Johnson, assembled the most valuable position in First Hawaiian, Inc. (NASDAQ:FHB). Gillson Capital had $6.4 million invested in the company at the end of the quarter. Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors also made a $4.2 million investment in the stock during the quarter. The following funds were also among the new FHB investors: Donald Sussman’s Paloma Partners, Michael Gelband’s ExodusPoint Capital, and Mika Toikka’s AlphaCrest Capital Management.
Let’s now take a look at hedge fund activity in other stocks similar to First Hawaiian, Inc. (NASDAQ:FHB). These stocks are Hillenbrand, Inc. (NYSE:HI), LivePerson, Inc. (NASDAQ:LPSN), ChemoCentryx Inc (NASDAQ:CCXI), National Vision Holdings, Inc. (NASDAQ:EYE), Cloudera, Inc. (NYSE:CLDR), PotlatchDeltic Corporation (NASDAQ:PCH), and Equitrans Midstream Corporation (NYSE:ETRN). This group of stocks’ market valuations match FHB’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HI | 15 | 17557 | 2 |
| LPSN | 31 | 193585 | -4 |
| CCXI | 20 | 385704 | -3 |
| EYE | 24 | 285800 | 0 |
| CLDR | 30 | 865678 | 1 |
| PCH | 26 | 152275 | 3 |
| ETRN | 28 | 361643 | 3 |
| Average | 24.9 | 323177 | 0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.9 hedge funds with bullish positions and the average amount invested in these stocks was $323 million. That figure was $174 million in FHB’s case. LivePerson, Inc. (NASDAQ:LPSN) is the most popular stock in this table. On the other hand Hillenbrand, Inc. (NYSE:HI) is the least popular one with only 15 bullish hedge fund positions. First Hawaiian, Inc. (NASDAQ:FHB) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for FHB is 42.9. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately FHB wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); FHB investors were disappointed as the stock returned 2.9% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
Follow First Hawaiian Inc. (NASDAQ:FHB)
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Disclosure: None. This article was originally published at Insider Monkey.
