Before putting in our own effort and resources into finding a good investment, we can quickly utilize hedge fund expertise to give us a quick glimpse of whether that stock could make for a good addition to our portfolios. The odds are not exactly stacked in investors’ favor when it comes to beating the market, as evidenced by the fact that less than 49% of the stocks in the S&P 500 did so during the third quarter. The stats were even worse in recent years when most of the advances in the market were due to large gains by FAANG stocks. However, one bright side for individual investors was the strong performance of hedge funds’ top consensus picks. This year hedge funds’ top 20 stock picks outperformed the S&P 500 Index by 9.9 percentage points through the end of November. Thus, we can see that the tireless research and efforts of hedge funds to identify winning stocks can work to our advantage when we know how to use the data. While not all of their picks will be winners, our odds are much better following their best stock picks than trying to go it alone.
Hedge fund interest in Mid Penn Bancorp (NASDAQ:MPB) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare MPB to other stocks including GP Strategies Corporation (NYSE:GPX), Ceragon Networks Ltd. (NASDAQ:CRNT), and New Age Beverages Corporation (NASDAQ:NBEV) to get a better sense of its popularity.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
If you’d ask most market participants, hedge funds are perceived as worthless, old investment tools of years past. While there are over 8000 funds with their doors open at the moment, Our researchers hone in on the masters of this group, about 750 funds. These hedge fund managers direct bulk of all hedge funds’ total capital, and by tailing their top equity investments, Insider Monkey has deciphered numerous investment strategies that have historically outrun the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points a 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 .
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 we’re going to go over the fresh hedge fund action regarding Mid Penn Bancorp (NASDAQ:MPB).
How are hedge funds trading Mid Penn Bancorp (NASDAQ:MPB)?
At the end of the third quarter, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the second quarter of 2019. Below, you can check out the change in hedge fund sentiment towards MPB over the last 17 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Jeffrey Gendell’s Tontine Asset Management has the number one position in Mid Penn Bancorp (NASDAQ:MPB), worth close to $3.2 million, amounting to 0.5% of its total 13F portfolio. The second most bullish fund manager is Emanuel J. Friedman of EJF Capital, with a $2 million position; 0.3% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions contain David P. Cohen’s Minerva Advisors, Renaissance Technologies and . In terms of the portfolio weights assigned to each position Minerva Advisors allocated the biggest weight to Mid Penn Bancorp (NASDAQ:MPB), around 0.7% of its 13F portfolio. Tontine Asset Management is also relatively very bullish on the stock, designating 0.45 percent of its 13F equity portfolio to MPB.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Mid Penn Bancorp (NASDAQ:MPB) but similarly valued. These stocks are GP Strategies Corporation (NYSE:GPX), Ceragon Networks Ltd. (NASDAQ:CRNT), New Age Beverages Corporation (NASDAQ:NBEV), and Monroe Capital Corp (NASDAQ:MRCC). All of these stocks’ market caps are similar to MPB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GPX | 13 | 103148 | 0 |
| CRNT | 3 | 11894 | -1 |
| NBEV | 6 | 1169 | 2 |
| MRCC | 6 | 2832 | 2 |
| Average | 7 | 29761 | 0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $30 million. That figure was $7 million in MPB’s case. GP Strategies Corporation (NYSE:GPX) is the most popular stock in this table. On the other hand Ceragon Networks Ltd. (NASDAQ:CRNT) is the least popular one with only 3 bullish hedge fund positions. Mid Penn Bancorp (NASDAQ:MPB) is not the least popular stock in this group but hedge fund interest is still below average. 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 MPB, though not to the same extent, as the stock returned 6% during the first two months of the fourth quarter and outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.