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 at Insider Monkey have plowed through 752 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article we look at what those investors think of Merchants Bancorp (NASDAQ:MBIN).
Merchants Bancorp (NASDAQ:MBIN) has seen an increase in activity from the world’s largest hedge funds in recent months. MBIN was in 8 hedge funds’ portfolios at the end of September. There were 6 hedge funds in our database with MBIN positions at the end of the previous quarter. Our calculations also showed that MBIN 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.
Matthew Lindenbaum of Basswood Capital
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. Let’s take a glance at the latest hedge fund action regarding Merchants Bancorp (NASDAQ:MBIN).
How have hedgies been trading Merchants Bancorp (NASDAQ:MBIN)?
At the end of the third quarter, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 33% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards MBIN over the last 17 quarters. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Matthew Lindenbaum’s Basswood Capital has the number one position in Merchants Bancorp (NASDAQ:MBIN), worth close to $3.5 million, corresponding to 0.3% of its total 13F portfolio. The second most bullish fund manager is Renaissance Technologies, with a $1.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that hold long positions encompass Paul Marshall and Ian Wace’s Marshall Wace, Ken Griffin’s Citadel Investment Group and David E. Shaw’s D E Shaw. In terms of the portfolio weights assigned to each position Basswood Capital allocated the biggest weight to Merchants Bancorp (NASDAQ:MBIN), around 0.25% of its 13F portfolio. Marshall Wace is also relatively very bullish on the stock, dishing out 0.01 percent of its 13F equity portfolio to MBIN.
As industrywide interest jumped, key hedge funds have jumped into Merchants Bancorp (NASDAQ:MBIN) headfirst. Citadel Investment Group, managed by Ken Griffin, assembled the most outsized position in Merchants Bancorp (NASDAQ:MBIN). Citadel Investment Group had $0.8 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also made a $0.3 million investment in the stock during the quarter.
Let’s check out hedge fund activity in other stocks similar to Merchants Bancorp (NASDAQ:MBIN). We will take a look at Chico’s FAS, Inc. (NYSE:CHS), FRP Holdings Inc (NASDAQ:FRPH), Diamond Hill Investment Group, Inc. (NASDAQ:DHIL), and American Vanguard Corporation (NYSE:AVD). This group of stocks’ market values resemble MBIN’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CHS | 14 | 57946 | 1 |
| FRPH | 8 | 39496 | 1 |
| DHIL | 15 | 46453 | 1 |
| AVD | 8 | 27502 | -3 |
| Average | 11.25 | 42849 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.25 hedge funds with bullish positions and the average amount invested in these stocks was $43 million. That figure was $8 million in MBIN’s case. Diamond Hill Investment Group, Inc. (NASDAQ:DHIL) is the most popular stock in this table. On the other hand FRP Holdings Inc (NASDAQ:FRPH) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Merchants Bancorp (NASDAQ:MBIN) is even less popular than FRPH. 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 MBIN, though not to the same extent, as the stock returned 8.7% during the fourth quarter (through 11/30) and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
