Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those successful funds in these small-cap stocks. In the following paragraphs, we analyze The First of Long Island Corporation (NASDAQ:FLIC) from the perspective of those successful funds.
Is The First of Long Island Corporation (NASDAQ:FLIC) a marvelous investment now? Investors who are in the know are categorically taking a bullish view. The number of long hedge fund bets swelled by 2 lately. There were 8 hedge funds in our database with FLIC positions at the end of September. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Pzena Investment Management, Inc. (NYSE:PZN), Strayer Education Inc (NASDAQ:STRA), and Meta Financial Group Inc. (NASDAQ:CASH) to gather more data points.
Follow First Of Long Island Corp (NASDAQ:FLIC)
Follow First Of Long Island Corp (NASDAQ:FLIC)
We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.
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How have hedgies been trading The First of Long Island Corporation (NASDAQ:FLIC)?
At the end of the third quarter, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, up by 33% from the second quarter of 2016. By comparison, 6 hedge funds held shares or bullish call options in FLIC heading into this year. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Basswood Capital, led by Matthew Lindenbaum, holds the biggest position in The First of Long Island Corporation (NASDAQ:FLIC). Basswood Capital has a $29 million position in the stock, comprising 1.4% of its 13F portfolio. The second most bullish fund manager is EJF Capital, led by Emanuel J. Friedman, holding a $13.3 million position; 1.1% of its 13F portfolio is allocated to the stock. Some other members of the smart money with similar optimism encompass Ric Dillon’s Diamond Hill Capital, Renaissance Technologies, one of the largest hedge funds in the world, and Richard Chilton’s Chilton Investment Company. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
As aggregate interest increased, specific money managers have jumped into The First of Long Island Corporation (NASDAQ:FLIC) headfirst. Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, initiated the biggest position in The First of Long Island Corporation (NASDAQ:FLIC). Arrowstreet Capital had $0.6 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also made a $0.2 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 The First of Long Island Corporation (NASDAQ:FLIC) but similarly valued. These stocks are Pzena Investment Management, Inc. (NYSE:PZN), Strayer Education Inc (NASDAQ:STRA), Meta Financial Group Inc. (NASDAQ:CASH), and SunCoke Energy, Inc (NYSE:SXC). This group of stocks’ market caps are closest to FLIC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PZN | 6 | 5208 | 2 |
| STRA | 11 | 49732 | -2 |
| CASH | 16 | 95501 | 1 |
| SXC | 14 | 157669 | -4 |
As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $77 million. That figure was $69 million in FLIC’s case. Meta Financial Group Inc. (NASDAQ:CASH) is the most popular stock in this table. On the other hand Pzena Investment Management, Inc. (NYSE:PZN) is the least popular one with only 6 bullish hedge fund positions. The First of Long Island Corporation (NASDAQ:FLIC) 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 CASH might be a better candidate to consider taking a long position in.
Disclosure: None
