Concerns over rising interest rates and expected further rate increases have hit several stocks hard during the fourth quarter of 2018. Trends reversed 180 degrees in 2019 amid Powell’s pivot and optimistic expectations towards a trade deal with China. Hedge funds and institutional investors tracked by Insider Monkey usually invest a disproportionate amount of their portfolios in smaller cap stocks. We have been receiving indications that hedge funds were increasing their overall exposure in the third quarter and this is one of the factors behind the recent movements in major indices. In this article, we will take a closer look at hedge fund sentiment towards Origin Bancorp, Inc. (NASDAQ:OBNK).
Is Origin Bancorp, Inc. (NASDAQ:OBNK) a superb stock to buy now? The smart money is buying. The number of long hedge fund positions went up by 2 in recent months. Our calculations also showed that OBNK isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). OBNK was in 6 hedge funds’ portfolios at the end of September. There were 4 hedge funds in our database with OBNK positions at the end of the previous quarter.
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.
Israel Englander of Millennium Management
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 go over the key hedge fund action encompassing Origin Bancorp, Inc. (NASDAQ:OBNK).
What have hedge funds been doing with Origin Bancorp, Inc. (NASDAQ:OBNK)?
At the end of the third quarter, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 50% from the second quarter of 2019. Below, you can check out the change in hedge fund sentiment towards OBNK over the last 17 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, Mendon Capital Advisors was the largest shareholder of Origin Bancorp, Inc. (NASDAQ:OBNK), with a stake worth $18.6 million reported as of the end of September. Trailing Mendon Capital Advisors was Forest Hill Capital, which amassed a stake valued at $4.4 million. Millennium Management, Renaissance Technologies, 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 Mendon Capital Advisors allocated the biggest weight to Origin Bancorp, Inc. (NASDAQ:OBNK), around 3.14% of its 13F portfolio. Forest Hill Capital is also relatively very bullish on the stock, dishing out 1.54 percent of its 13F equity portfolio to OBNK.
Consequently, key money managers have jumped into Origin Bancorp, Inc. (NASDAQ:OBNK) headfirst. Marshall Wace, managed by Paul Marshall and Ian Wace, established the most valuable position in Origin Bancorp, Inc. (NASDAQ:OBNK). Marshall Wace had $0.9 million invested in the company at the end of the quarter. David Harding’s Winton Capital Management also made a $0.4 million investment in the stock during the quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Origin Bancorp, Inc. (NASDAQ:OBNK) but similarly valued. These stocks are Carolina Financial Corporation (NASDAQ:CARO), Northfield Bancorp Inc (NASDAQ:NFBK), Banco Latinoamericano de Comercio Exterior, S.A. (NYSE:BLX), and TrustCo Bank Corp NY (NASDAQ:TRST). This group of stocks’ market values are similar to OBNK’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CARO | 8 | 48350 | 0 |
| NFBK | 8 | 40560 | 6 |
| BLX | 1 | 6635 | 0 |
| TRST | 11 | 43376 | -1 |
| Average | 7 | 34730 | 1.25 |
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 $35 million. That figure was $30 million in OBNK’s case. TrustCo Bank Corp NY (NASDAQ:TRST) is the most popular stock in this table. On the other hand Banco Latinoamericano de Comercio Exterior, S.A. (NYSE:BLX) is the least popular one with only 1 bullish hedge fund positions. Origin Bancorp, Inc. (NASDAQ:OBNK) 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 OBNK, 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.
