The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st. We at Insider Monkey have made an extensive database of more than 866 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Sierra Bancorp (NASDAQ:BSRR) based on those filings.
Sierra Bancorp (NASDAQ:BSRR) investors should pay attention to a decrease in hedge fund interest recently. Sierra Bancorp (NASDAQ:BSRR) was in 6 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 10. Our calculations also showed that BSRR 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.
Matthew Lindenbaum of Basswood Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $24 biotech stock and is trying to buy the rest for around $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 we’re going to review the new hedge fund action surrounding Sierra Bancorp (NASDAQ:BSRR).
Do Hedge Funds Think BSRR Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -33% from the previous quarter. By comparison, 5 hedge funds held shares or bullish call options in BSRR a year ago. So, let’s check out 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 Sierra Bancorp (NASDAQ:BSRR), which was worth $9.3 million at the end of the fourth quarter. On the second spot was Basswood Capital which amassed $1.5 million worth of shares. Citadel Investment Group, D E Shaw, and Arrowstreet Capital 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 Basswood Capital allocated the biggest weight to Sierra Bancorp (NASDAQ:BSRR), around 0.07% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, setting aside 0.01 percent of its 13F equity portfolio to BSRR.
Because Sierra Bancorp (NASDAQ:BSRR) has witnessed a decline in interest from the aggregate hedge fund industry, logic holds that there is a sect of hedge funds that slashed their full holdings heading into Q2. It’s worth mentioning that Israel Englander’s Millennium Management sold off the largest position of the “upper crust” of funds watched by Insider Monkey, totaling close to $0.7 million in stock, and Noam Gottesman’s GLG Partners was right behind this move, as the fund sold off about $0.5 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 3 funds heading into Q2.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Sierra Bancorp (NASDAQ:BSRR) but similarly valued. These stocks are NexImmune, Inc. (NASDAQ:NEXI), Donegal Group, Inc. (NASDAQ:DGICB), Oncternal Therapeutics, Inc. (NASDAQ:ONCT), Intrusion Inc. (NASDAQ:INTZ), South Plains Financial, Inc. (NASDAQ:SPFI), Profound Medical Corp. (NASDAQ:PROF), and Aenza S.A.A. (NYSE:AENZ). All of these stocks’ market caps match BSRR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NEXI | 12 | 59288 | 12 |
| DGICB | 1 | 241 | 0 |
| ONCT | 9 | 19697 | -3 |
| INTZ | 5 | 5936 | 2 |
| SPFI | 6 | 8784 | 3 |
| PROF | 14 | 88759 | 0 |
| AENZ | 1 | 43 | -1 |
| Average | 6.9 | 26107 | 1.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.9 hedge funds with bullish positions and the average amount invested in these stocks was $26 million. That figure was $14 million in BSRR’s case. Profound Medical Corp. (NASDAQ:PROF) is the most popular stock in this table. On the other hand Donegal Group, Inc. (NASDAQ:DGICB) is the least popular one with only 1 bullish hedge fund positions. Sierra Bancorp (NASDAQ:BSRR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BSRR is 39.2. 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. 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 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 19.3% in 2021 through June 25th and surpassed the market again by 4.8 percentage points. Unfortunately BSRR wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); BSRR investors were disappointed as the stock returned -5% since the end of March (through 6/25) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.
