At Insider Monkey, we pore over the filings of nearly 873 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of June 30th. In this article, we will use that wealth of knowledge to determine whether or not Bank of Marin Bancorp (NASDAQ:BMRC) makes for a good investment right now.
Bank of Marin Bancorp (NASDAQ:BMRC) shareholders have witnessed an increase in hedge fund sentiment in recent months. Bank of Marin Bancorp (NASDAQ:BMRC) was in 10 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 8. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that BMRC isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV 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. Now we’re going to take a peek at the new hedge fund action encompassing Bank of Marin Bancorp (NASDAQ:BMRC).
Do Hedge Funds Think BMRC Is A Good Stock To Buy Now?
At Q2’s end, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 150% from the previous quarter. By comparison, 8 hedge funds held shares or bullish call options in BMRC a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Bank of Marin Bancorp (NASDAQ:BMRC), with a stake worth $7.4 million reported as of the end of June. Trailing Renaissance Technologies was Fourthstone LLC, which amassed a stake valued at $3.2 million. Citadel Investment Group, Two Sigma Advisors, and Marshall Wace LLP 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 Fourthstone LLC allocated the biggest weight to Bank of Marin Bancorp (NASDAQ:BMRC), around 1.34% of its 13F portfolio. Winton Capital Management is also relatively very bullish on the stock, setting aside 0.02 percent of its 13F equity portfolio to BMRC.
As industrywide interest jumped, some big names were leading the bulls’ herd. Fourthstone LLC, managed by Phil Stone, created the most outsized position in Bank of Marin Bancorp (NASDAQ:BMRC). Fourthstone LLC had $3.2 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $1.4 million position during the quarter. The following funds were also among the new BMRC investors: Israel Englander’s Millennium Management, Matthew Stadelman’s Diamond Hill Capital, and D. E. Shaw’s D E Shaw.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Bank of Marin Bancorp (NASDAQ:BMRC) but similarly valued. We will take a look at ASA Gold and Precious Metals Ltd (NYSE:ASA), FSB Bancorp, Inc. (NASDAQ:FSBC), Kindred Biosciences Inc (NASDAQ:KIN), Fidus Investment Corp (NASDAQ:FDUS), Castlight Health Inc (NYSE:CSLT), Oramed Pharmaceuticals Inc. (NASDAQ:ORMP), and Homology Medicines, Inc. (NASDAQ:FIXX). All of these stocks’ market caps are similar to BMRC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ASA | 6 | 13636 | 0 |
| FSBC | 8 | 17639 | 8 |
| KIN | 17 | 154616 | 6 |
| FDUS | 4 | 12298 | -1 |
| CSLT | 18 | 55591 | -6 |
| ORMP | 6 | 4095 | 2 |
| FIXX | 12 | 16069 | 5 |
| Average | 10.1 | 39135 | 2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.1 hedge funds with bullish positions and the average amount invested in these stocks was $39 million. That figure was $18 million in BMRC’s case. Castlight Health Inc (NYSE:CSLT) is the most popular stock in this table. On the other hand Fidus Investment Corp (NASDAQ:FDUS) is the least popular one with only 4 bullish hedge fund positions. Bank of Marin Bancorp (NASDAQ:BMRC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BMRC is 61.4. 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 25.7% in 2021 through September 27th and still beat the market by 6.2 percentage points. A small number of hedge funds were also right about betting on BMRC as the stock returned 20.9% since the end of the second quarter (through 9/27) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
