Hedge Funds Are Selling Southern Missouri Bancorp, Inc. (SMBC)

In this article we will analyze whether Southern Missouri Bancorp, Inc. (NASDAQ:SMBC) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.

Is Southern Missouri Bancorp, Inc. (NASDAQ:SMBC) worth your attention right now? Prominent investors were getting less optimistic. The number of long hedge fund bets were trimmed by 1 recently. Southern Missouri Bancorp, Inc. (NASDAQ:SMBC) was in 3 hedge funds’ portfolios at the end of March. The all time high for this statistic is 5. Our calculations also showed that SMBC 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.

Roger Ibbotson of Zebra Capital Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stock for $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. Now let’s check out the fresh hedge fund action encompassing Southern Missouri Bancorp, Inc. (NASDAQ:SMBC).

Do Hedge Funds Think SMBC Is A Good Stock To Buy Now?

At the end of the first quarter, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -25% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards SMBC over the last 23 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Royce & Associates was the largest shareholder of Southern Missouri Bancorp, Inc. (NASDAQ:SMBC), with a stake worth $7.9 million reported as of the end of March. Trailing Royce & Associates was Renaissance Technologies, which amassed a stake valued at $4.7 million. Zebra Capital Management was 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 Zebra Capital Management allocated the biggest weight to Southern Missouri Bancorp, Inc. (NASDAQ:SMBC), around 0.28% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, designating 0.05 percent of its 13F equity portfolio to SMBC.

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Millennium Management. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because none of the 750+ hedge funds tracked by Insider Monkey identified SMBC as a viable investment and initiated a position in the stock.

Let’s now review hedge fund activity in other stocks similar to Southern Missouri Bancorp, Inc. (NASDAQ:SMBC). We will take a look at América Móvil, S.A.B. de C.V. (NYSE:AMOV), Primis Financial Corp. (NASDAQ:FRST), Experience Investment Corp. (NASDAQ:EXPC), American Outdoor Brands, Inc. (NASDAQ:AOUT), P.A.M. Transportation Services, Inc. (NASDAQ:PTSI), GTY Technology Holdings, Inc. (NASDAQ:GTYH), and Del Taco Restaurants Inc (NASDAQ:TACO). This group of stocks’ market values match SMBC’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 7.7 hedge funds with bullish positions and the average amount invested in these stocks was $25 million. That figure was $13 million in SMBC’s case. American Outdoor Brands, Inc. (NASDAQ:AOUT) is the most popular stock in this table. On the other hand América Móvil, S.A.B. de C.V. (NYSE:AMOV) is the least popular one with only 1 bullish hedge fund positions. Southern Missouri Bancorp, Inc. (NASDAQ:SMBC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SMBC is 28.7. 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 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. A small number of hedge funds were also right about betting on SMBC as the stock returned 16.9% since the end of the first quarter (through 6/11) and outperformed the market by an even larger margin.

Disclosure: None. This article was originally published at Insider Monkey.