We are still in an overall bull market and many stocks that smart money investors were piling into surged through the end of November. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 54% and 51% respectively. Hedge funds’ top 3 stock picks returned 41.7% this year and beat the S&P 500 ETFs by 14 percentage points. Investing in index funds guarantees your average returns, not superior returns. We are looking to generate superior returns for our readers. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like First Bancorp (NASDAQ:FBNC).
First Bancorp (NASDAQ:FBNC) investors should pay attention to an increase in activity from the world’s largest hedge funds of late. FBNC was in 15 hedge funds’ portfolios at the end of September. There were 14 hedge funds in our database with FBNC holdings at the end of the previous quarter. Our calculations also showed that FBNC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
If you’d ask most shareholders, hedge funds are seen as slow, outdated investment vehicles of years past. While there are over 8000 funds trading at present, Our researchers hone in on the top tier of this group, approximately 750 funds. These investment experts control the bulk of the hedge fund industry’s total capital, and by shadowing their top picks, Insider Monkey has unsheathed many investment strategies that have historically surpassed the broader indices. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points per year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update.
Israel Englander of Millennium Management
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 glance at the fresh hedge fund action surrounding First Bancorp (NASDAQ:FBNC).
How are hedge funds trading First Bancorp (NASDAQ:FBNC)?
Heading into the fourth quarter of 2019, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 7% from the previous quarter. On the other hand, there were a total of 16 hedge funds with a bullish position in FBNC 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.
More specifically, Renaissance Technologies was the largest shareholder of First Bancorp (NASDAQ:FBNC), with a stake worth $22.2 million reported as of the end of September. Trailing Renaissance Technologies was Mendon Capital Advisors, which amassed a stake valued at $17.4 million. Millennium Management, Forest Hill Capital, and Castine Capital Management 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, Mendon Capital Advisors allocated the biggest weight to First Bancorp (NASDAQ:FBNC), around 2.94% of its 13F portfolio. Forest Hill Capital is also relatively very bullish on the stock, designating 2.76 percent of its 13F equity portfolio to FBNC.
Consequently, specific money managers have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, established the largest call position in First Bancorp (NASDAQ:FBNC). Citadel Investment Group had $0.4 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also initiated a $0.2 million position during the quarter. The only other fund with a new position in the stock is Mario Gabelli’s GAMCO Investors.
Let’s go over hedge fund activity in other stocks similar to First Bancorp (NASDAQ:FBNC). We will take a look at Navigant Consulting, Inc. (NYSE:NCI), The E.W. Scripps Company (NYSE:SSP), MTS Systems Corporation (NASDAQ:MTSC), and Innoviva, Inc. (NASDAQ:INVA). This group of stocks’ market values matches FBNC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NCI | 16 | 110997 | 5 |
| SSP | 17 | 132414 | 0 |
| MTSC | 18 | 120517 | 6 |
| INVA | 24 | 224572 | 1 |
| Average | 18.75 | 147125 | 3 |
View the table here if you experience formatting issues.
As you can see these stocks had an average of 18.75 hedge funds with bullish positions and the average amount invested in these stocks was $147 million. That figure was $85 million in FBNC’s case. Innoviva, Inc. (NASDAQ:INVA) is the most popular stock in this table. On the other hand, Navigant Consulting, Inc. (NYSE:NCI) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks First Bancorp (NASDAQ:FBNC) is even less popular than NCI. 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. A small number of hedge funds were also right about betting on FBNC, though not to the same extent, as the stock returned 8.9% during the fourth quarter (through 11/30) and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
