With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter. One of these stocks was Hanmi Financial Corp (NASDAQ:HAFC).
Is Hanmi Financial Corp (NASDAQ:HAFC) going to take off soon? Investors who are in the know are getting more bullish. The number of bullish hedge fund positions inched up by 1 in recent months. Our calculations also showed that HAFC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). HAFC was in 9 hedge funds’ portfolios at the end of the third quarter of 2019. There were 8 hedge funds in our database with HAFC positions at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Today there are a lot of gauges shareholders put to use to grade stocks. A couple of the most under-the-radar gauges are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the best picks of the elite hedge fund managers can outpace their index-focused peers by a solid margin (see the details here).
Chuck Royce of Royce & Associates
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. We’re going to take a peek at the key hedge fund action surrounding Hanmi Financial Corp (NASDAQ:HAFC).
How are hedge funds trading Hanmi Financial Corp (NASDAQ:HAFC)?
Heading into the fourth quarter of 2019, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from one quarter earlier. On the other hand, there were a total of 12 hedge funds with a bullish position in HAFC a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Renaissance Technologies held the most valuable stake in Hanmi Financial Corp (NASDAQ:HAFC), which was worth $17.1 million at the end of the third quarter. On the second spot was AQR Capital Management which amassed $5.8 million worth of shares. Arrowstreet Capital, Royce & Associates, and Citadel Investment Group 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 Weld Capital Management allocated the biggest weight to Hanmi Financial Corp (NASDAQ:HAFC), around 0.04% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, designating 0.02 percent of its 13F equity portfolio to HAFC.
Now, key hedge funds were breaking ground themselves. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the biggest position in Hanmi Financial Corp (NASDAQ:HAFC). Arrowstreet Capital had $2.5 million invested in the company at the end of the quarter. David Harding’s Winton Capital Management also initiated a $0.2 million position during the quarter. The only other fund with a new position in the stock is Minhua Zhang’s Weld Capital Management.
Let’s now review hedge fund activity in other stocks similar to Hanmi Financial Corp (NASDAQ:HAFC). These stocks are Ultra Clean Holdings Inc (NASDAQ:UCTT), First Mid Bancshares, Inc. (NASDAQ:FMBH), Tucows Inc. (NASDAQ:TCX), and Accel Entertainment, Inc. (NYSE:TPGH). This group of stocks’ market caps are similar to HAFC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| UCTT | 13 | 65196 | 2 |
| FMBH | 5 | 11001 | 2 |
| TCX | 6 | 37855 | -2 |
| TPGH | 21 | 184285 | 2 |
| Average | 11.25 | 74584 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.25 hedge funds with bullish positions and the average amount invested in these stocks was $75 million. That figure was $31 million in HAFC’s case. Accel Entertainment, Inc. (NYSE:TPGH) is the most popular stock in this table. On the other hand First Mid Bancshares, Inc. (NASDAQ:FMBH) is the least popular one with only 5 bullish hedge fund positions. Hanmi Financial Corp (NASDAQ:HAFC) 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 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately HAFC wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); HAFC investors were disappointed as the stock returned 5.8% during the first two months of the fourth 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 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
