The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider Select Bancorp, Inc. (NASDAQ:SLCT) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Select Bancorp, Inc. (NASDAQ:SLCT) has experienced an increase in hedge fund interest of late. Our calculations also showed that SLCT 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.
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 flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Jim Simons of Renaissance Technologies
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. 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 even check out this option genius’ weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock already gained 20 percent. Now let’s take a look at the latest hedge fund action encompassing Select Bancorp, Inc. (NASDAQ:SLCT).
How are hedge funds trading Select Bancorp, Inc. (NASDAQ:SLCT)?
Heading into the fourth quarter of 2019, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards SLCT over the last 17 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Elizabeth Park Capital Management was the largest shareholder of Select Bancorp, Inc. (NASDAQ:SLCT), with a stake worth $6 million reported as of the end of September. Trailing Elizabeth Park Capital Management was Renaissance Technologies, which amassed a stake valued at $1.9 million. Mendon Capital Advisors, Seidman Investment Partnership, and Marshall Wace 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 Elizabeth Park Capital Management allocated the biggest weight to Select Bancorp, Inc. (NASDAQ:SLCT), around 2.35% of its 13F portfolio. Seidman Investment Partnership is also relatively very bullish on the stock, designating 0.88 percent of its 13F equity portfolio to SLCT.
Now, some big names were leading the bulls’ herd. Marshall Wace, managed by Paul Marshall and Ian Wace, assembled the most valuable position in Select Bancorp, Inc. (NASDAQ:SLCT). Marshall Wace had $0.1 million invested in the company at the end of the quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Select Bancorp, Inc. (NASDAQ:SLCT) but similarly valued. These stocks are Northern Dynasty Minerals Ltd. (NYSE:NAK), Trecora Resources (NYSE:TREC), Tailored Brands, Inc. (NYSE:TLRD), and Vince Holding Corp (NYSE:VNCE). This group of stocks’ market values resemble SLCT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NAK | 5 | 5817 | -1 |
| TREC | 10 | 23735 | 2 |
| TLRD | 12 | 21294 | -6 |
| VNCE | 3 | 6052 | 1 |
| Average | 7.5 | 14225 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.5 hedge funds with bullish positions and the average amount invested in these stocks was $14 million. That figure was $10 million in SLCT’s case. Tailored Brands, Inc. (NYSE:TLRD) is the most popular stock in this table. On the other hand Vince Holding Corp (NYSE:VNCE) is the least popular one with only 3 bullish hedge fund positions. Select Bancorp, Inc. (NASDAQ:SLCT) 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. 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. Unfortunately SLCT wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); SLCT investors were disappointed as the stock returned 2.8% during the first two months of the fourth quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
