Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow over 700 of the best-performing investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Heartland Financial USA Inc (NASDAQ:HTLF), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is Heartland Financial USA Inc (NASDAQ:HTLF) the right investment to pursue these days? Prominent investors are turning less bullish. The number of long hedge fund bets fell by 1 recently. Heartland Financial USA Inc (NASDAQ:HTLF) was in 8 hedge funds’ portfolios at the end of September. There were 9 hedge funds in our database with Heartland Financial USA Inc (NASDAQ:HTLF) positions at the end of the previous quarter. In terms of stock market environment, the shares of Heartland Financial USA Inc (NASDAQ:HTLF) were slightly down, falling 2.5% during the quarter. We are going to find out more about the hedge funds that maintained positions in the company, at the end of September.
At the end of this article, we will also compare Heartland Financial USA Inc (NASDAQ:HTLF) to other stocks, including P.H. Glatfelter Company (NYSE:GLT), Speedway Motorsports, Inc. (NYSE:TRK), and Bona Film Group Ltd (ADR) (NASDAQ:BONA) to get a better sense of its popularity.
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In the eyes of most market participants, hedge funds are perceived as underperforming, outdated financial vehicles of years past. While there are more than 8000 funds trading at present, we choose to focus on the bigwigs of this club, approximately 700 funds. Most estimates calculate that this group of people commands the lion’s share of all hedge funds’ total capital, and by observing their unrivaled picks, Insider Monkey has come up with a few investment strategies that have historically defeated the broader indices. Insider Monkey’s small-cap hedge fund strategy outperformed the S&P 500 index by 12 percentage points a year for a decade in their back tests.
With all of this in mind, let’s take a gander at the fresh action surrounding Heartland Financial USA Inc (NASDAQ:HTLF).
How are hedge funds trading Heartland Financial USA Inc (NASDAQ:HTLF)?
At the end of September, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a decline of 11% from the second quarter. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Renaissance Technologies has the largest position in Heartland Financial USA Inc (NASDAQ:HTLF), worth close to $4 million, amounting to less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Bryn Mawr Capital, managed by Ken Gray and Steve Walsh, which holds a $2.6 million position; 0.5% of its 13F portfolio is allocated to the stock. Some other professional money managers that hold long positions consist of Israel Englander’s Millennium Management, John Overdeck and David Siegel’s Two Sigma Advisors, and Cliff Asness’ AQR Capital Management.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: D E Shaw. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically, a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case here because none of the 700+ hedge funds tracked by Insider Monkey identified Heartland Financial USA Inc (NASDAQ:HTLF) as a viable investment and initiated a position in the stock.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Heartland Financial USA Inc (NASDAQ:HTLF) but similarly valued. We will take a look at P.H. Glatfelter Company (NYSE:GLT), Speedway Motorsports, Inc. (NYSE:TRK), Bona Film Group Ltd (ADR) (NASDAQ:BONA), and Hecla Mining Company (NYSE:HL). All of these stocks’ market caps are closest to Heartland Financial USA Inc (NASDAQ:HTLF)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GLT | 12 | 11318 | 3 |
| TRK | 15 | 17495 | 5 |
| BONA | 7 | 17491 | 2 |
| HL | 7 | 13605 | -4 |
As you can see, these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $15 million. That figure was $11 million in Heartland Financial USA Inc (NASDAQ:HTLF)’s case. Speedway Motorsports, Inc. (NYSE:TRK) is the most popular stock in this table. On the other hand, Bona Film Group Ltd (ADR) (NASDAQ:BONA) is the least popular one with only 7 bullish hedge fund positions. Heartland Financial USA Inc (NASDAQ:HTLF) is not the least popular stock in this group, 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, Speedway Motorsports, Inc. (NYSE:TRK) might be a better candidate to consider a long position.