We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Peltz’s recent General Electric losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards PB Bancorp, Inc. (NASDAQ:PBBI).
PB Bancorp, Inc. (NASDAQ:PBBI) was in 4 hedge funds’ portfolios at the end of the third quarter of 2019. PBBI shareholders have witnessed an increase in hedge fund sentiment lately. There were 3 hedge funds in our database with PBBI holdings at the end of the previous quarter. Our calculations also showed that PBBI 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.
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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 take a look at the latest hedge fund action surrounding PB Bancorp, Inc. (NASDAQ:PBBI).
Hedge fund activity in PB Bancorp, Inc. (NASDAQ:PBBI)
Heading into the fourth quarter of 2019, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from the second quarter of 2019. On the other hand, there were a total of 4 hedge funds with a bullish position in PBBI a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Paul Magidson, Jonathan Cohen. And Ostrom Enders’s Castine Capital Management has the largest position in PB Bancorp, Inc. (NASDAQ:PBBI), worth close to $2.4 million, accounting for 0.6% of its total 13F portfolio. The second most bullish fund manager is Seidman Investment Partnership, led by Lawrence Seidman, holding a $1.5 million position; 1.4% of its 13F portfolio is allocated to the stock. Remaining professional money managers with similar optimism include John D. Gillespie’s Prospector Partners, David P. Cohen’s Minerva Advisors and . In terms of the portfolio weights assigned to each position Seidman Investment Partnership allocated the biggest weight to PB Bancorp, Inc. (NASDAQ:PBBI), around 1.39% of its 13F portfolio. Castine Capital Management is also relatively very bullish on the stock, dishing out 0.65 percent of its 13F equity portfolio to PBBI.
With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Castine Capital Management, managed by Paul Magidson, Jonathan Cohen. And Ostrom Enders, initiated the most valuable position in PB Bancorp, Inc. (NASDAQ:PBBI). Castine Capital Management had $2.4 million invested in the company at the end of the quarter.
Let’s now review hedge fund activity in other stocks similar to PB Bancorp, Inc. (NASDAQ:PBBI). We will take a look at Platinum Group Metals Limited (NYSE:PLG), Rosehill Resources Inc. (NASDAQ:ROSE), Orion Energy Systems, Inc. (NASDAQ:OESX), and A-Mark Precious Metals, Inc. (NASDAQ:AMRK). This group of stocks’ market valuations resemble PBBI’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PLG | 4 | 1455 | 0 |
| ROSE | 5 | 2051 | 0 |
| OESX | 6 | 7956 | -1 |
| AMRK | 3 | 1227 | 0 |
| Average | 4.5 | 3172 | -0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 4.5 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $5 million in PBBI’s case. Orion Energy Systems, Inc. (NASDAQ:OESX) is the most popular stock in this table. On the other hand A-Mark Precious Metals, Inc. (NASDAQ:AMRK) is the least popular one with only 3 bullish hedge fund positions. PB Bancorp, Inc. (NASDAQ:PBBI) 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 PBBI as the stock returned 32.2% during the first two months of Q4 and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.