Hedge Funds Are Buying Level One Bancorp, Inc. (LEVL)

While the market driven by short-term sentiment influenced by the accommodative interest rate environment in the US, virus news and stimulus spending, many smart money investors are starting to get cautious towards the current bull run since March, 2020 and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 40,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Level One Bancorp, Inc. (NASDAQ:LEVL).

Level One Bancorp, Inc. (NASDAQ:LEVL) investors should be aware of an increase in activity from the world’s largest hedge funds lately. Level One Bancorp, Inc. (NASDAQ:LEVL) was in 3 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 4. There were 2 hedge funds in our database with LEVL holdings at the end of December. Our calculations also showed that LEVL isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Fred DiSanto of Ancora Advisors

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. 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 let’s take a glance at the new hedge fund action regarding Level One Bancorp, Inc. (NASDAQ:LEVL).

Do Hedge Funds Think LEVL Is A Good Stock To Buy Now?

At Q1’s end, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 50% from one quarter earlier. On the other hand, there were a total of 3 hedge funds with a bullish position in LEVL a year ago. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

Among these funds, Renaissance Technologies held the most valuable stake in Level One Bancorp, Inc. (NASDAQ:LEVL), which was worth $0.8 million at the end of the fourth quarter. On the second spot was Millennium Management which amassed $0.2 million worth of shares. Ancora Advisors was 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 Ancora Advisors allocated the biggest weight to Level One Bancorp, Inc. (NASDAQ:LEVL), around 0.0041% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, earmarking 0.001 percent of its 13F equity portfolio to LEVL.

As aggregate interest increased, key hedge funds were leading the bulls’ herd. Renaissance Technologies, created the most outsized position in Level One Bancorp, Inc. (NASDAQ:LEVL). Renaissance Technologies had $0.8 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $0.2 million investment in the stock during the quarter.

Let’s also examine hedge fund activity in other stocks similar to Level One Bancorp, Inc. (NASDAQ:LEVL). We will take a look at Gold Resource Corporation (NYSE:GORO), Jowell Global Ltd. (NASDAQ:JWEL), Community Bankers Trust Corp. (NASDAQ:ESXB), Gencor Industries, Inc. (NASDAQ:GENC), Chemung Financial Corp. (NASDAQ:CHMG), Quad/Graphics, Inc. (NYSE:QUAD), and OptiNose, Inc. (NASDAQ:OPTN). This group of stocks’ market valuations resemble LEVL’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 5.4 hedge funds with bullish positions and the average amount invested in these stocks was $10 million. That figure was $1 million in LEVL’s case. Quad/Graphics, Inc. (NYSE:QUAD) is the most popular stock in this table. On the other hand Jowell Global Ltd. (NASDAQ:JWEL) is the least popular one with only 1 bullish hedge fund positions. Level One Bancorp, Inc. (NASDAQ:LEVL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for LEVL is 39.6. 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. 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 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. A small number of hedge funds were also right about betting on LEVL as the stock returned 9.1% since the end of the first quarter (through 6/11) and outperformed the market by an even larger margin.

Disclosure: None. This article was originally published at Insider Monkey.