In this article we will take a look at whether hedge funds think Select Bancorp, Inc. (NASDAQ:SLCT) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Select Bancorp, Inc. (NASDAQ:SLCT) shareholders have witnessed an increase in activity from the world’s largest hedge funds of late. Our calculations also showed that SLCT 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.
According to most market participants, hedge funds are seen as slow, old financial vehicles of the past. While there are more than 8000 funds trading today, Our experts choose to focus on the aristocrats of this group, around 850 funds. It is estimated that this group of investors control bulk of the smart money’s total capital, and by watching their first-class stock picks, Insider Monkey has discovered a few investment strategies that have historically outstripped Mr. Market. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Fred Cummings of Elizabeth Park Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. 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 the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s analyze the new hedge fund action regarding Select Bancorp, Inc. (NASDAQ:SLCT).
What have hedge funds been doing with Select Bancorp, Inc. (NASDAQ:SLCT)?
Heading into the second quarter of 2020, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a change of 20% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards SLCT 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, Fred Cummings’s Elizabeth Park Capital Management has the most valuable position in Select Bancorp, Inc. (NASDAQ:SLCT), worth close to $4 million, accounting for 3% of its total 13F portfolio. Coming in second is Fourthstone LLC, managed by Phil Stone, which holds a $2.8 million position; the fund has 2.5% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish include Renaissance Technologies, Anton Schutz’s Mendon Capital Advisors and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position Elizabeth Park Capital Management allocated the biggest weight to Select Bancorp, Inc. (NASDAQ:SLCT), around 3.04% of its 13F portfolio. Fourthstone LLC is also relatively very bullish on the stock, dishing out 2.54 percent of its 13F equity portfolio to SLCT.
As one would reasonably expect, specific money managers have jumped into Select Bancorp, Inc. (NASDAQ:SLCT) headfirst. Fourthstone LLC, managed by Phil Stone, assembled the most outsized position in Select Bancorp, Inc. (NASDAQ:SLCT). Fourthstone LLC had $2.8 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0.1 million investment in the stock during the quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Select Bancorp, Inc. (NASDAQ:SLCT) but similarly valued. We will take a look at Liquidia Technologies, Inc. (NASDAQ:LQDA), Horizon Technology Finance Corp (NASDAQ:HRZN), First Guaranty Bancshares, Inc. (NASDAQ:FGBI), and Liberty Tripadvisor Holdings Inc (NASDAQ:LTRPA). All of these stocks’ market caps match SLCT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LQDA | 6 | 14895 | -1 |
| HRZN | 3 | 2998 | -1 |
| FGBI | 1 | 557 | 0 |
| LTRPA | 21 | 37842 | -2 |
| Average | 7.75 | 14073 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.75 hedge funds with bullish positions and the average amount invested in these stocks was $14 million. That figure was $9 million in SLCT’s case. Liberty Tripadvisor Holdings Inc (NASDAQ:LTRPA) is the most popular stock in this table. On the other hand First Guaranty Bancshares, Inc. (NASDAQ:FGBI) is the least popular one with only 1 bullish hedge fund positions. Select Bancorp, Inc. (NASDAQ:SLCT) 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. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th and surpassed the market by 14.2 percentage points. Unfortunately SLCT wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); SLCT investors were disappointed as the stock returned 7.5% during the second quarter 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 in 2020.
Follow Select Bancorp Inc. (NYSE:SLCT)
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Disclosure: None. This article was originally published at Insider Monkey.
