The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of LCNB Corp. (NASDAQ:LCNB).
Is LCNB Corp. (NASDAQ:LCNB) a buy here? Hedge funds are becoming more confident. The number of long hedge fund positions went up by 1 recently. Our calculations also showed that LCNB 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). LCNB was in 3 hedge funds’ portfolios at the end of March. There were 2 hedge funds in our database with LCNB positions at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 72% since March 2017 and outperformed the S&P 500 ETFs by more than 44 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
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. Now let’s view the recent hedge fund action encompassing LCNB Corp. (NASDAQ:LCNB).
What have hedge funds been doing with LCNB Corp. (NASDAQ:LCNB)?
At the end of the first quarter, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of 50% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards LCNB over the last 18 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Renaissance Technologies has the biggest position in LCNB Corp. (NASDAQ:LCNB), worth close to $2.7 million, accounting for less than 0.1%% of its total 13F portfolio. The second most bullish fund manager is Millennium Management, managed by Israel Englander, which holds a $0.2 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 Zebra Capital Management allocated the biggest weight to LCNB Corp. (NASDAQ:LCNB), around 0.29% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, designating 0.0026 percent of its 13F equity portfolio to LCNB.
As one would reasonably expect, key hedge funds were breaking ground themselves. Millennium Management, managed by Israel Englander, established the largest position in LCNB Corp. (NASDAQ:LCNB). Millennium Management had $0.2 million invested in the company at the end of the quarter.
Let’s now take a look at hedge fund activity in other stocks similar to LCNB Corp. (NASDAQ:LCNB). These stocks are Sol-Gel Technologies Ltd. (NASDAQ:SLGL), First Internet Bancorp (NASDAQ:INBK), FS Bancorp, Inc. (NASDAQ:FSBW), and Profound Medical Corp. (NASDAQ:PROF). This group of stocks’ market valuations are similar to LCNB’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SLGL | 4 | 6944 | 0 |
| INBK | 8 | 4503 | 0 |
| FSBW | 5 | 11452 | -3 |
| PROF | 8 | 16670 | 5 |
| Average | 6.25 | 9892 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.25 hedge funds with bullish positions and the average amount invested in these stocks was $10 million. That figure was $3 million in LCNB’s case. First Internet Bancorp (NASDAQ:INBK) is the most popular stock in this table. On the other hand Sol-Gel Technologies Ltd. (NASDAQ:SLGL) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks LCNB Corp. (NASDAQ:LCNB) is even less popular than SLGL. Hedge funds dodged a bullet by taking a bearish stance towards LCNB. 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 LCNB wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); LCNB investors were disappointed as the stock returned 8.1% 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.