The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Community Bankers Trust Corp. (NASDAQ:ESXB) based on those filings.
Is Community Bankers Trust Corp. (NASDAQ:ESXB) a worthy stock to buy now? Prominent investors are turning bullish. The number of long hedge fund positions rose by 2 recently. Our calculations also showed that ESXB isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Ken Griffin of Citadel Investment Group
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to take a peek at the fresh hedge fund action encompassing Community Bankers Trust Corp. (NASDAQ:ESXB).
Hedge fund activity in Community Bankers Trust Corp. (NASDAQ:ESXB)
Heading into the second quarter of 2020, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a change of 40% from the fourth quarter of 2019. By comparison, 4 hedge funds held shares or bullish call options in ESXB a year ago. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
Among these funds, Castine Capital Management held the most valuable stake in Community Bankers Trust Corp. (NASDAQ:ESXB), which was worth $10 million at the end of the third quarter. On the second spot was Fourthstone LLC which amassed $1.8 million worth of shares. Renaissance Technologies, EJF Capital, and Mendon Capital Advisors 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 Castine Capital Management allocated the biggest weight to Community Bankers Trust Corp. (NASDAQ:ESXB), around 5.46% of its 13F portfolio. Fourthstone LLC is also relatively very bullish on the stock, setting aside 1.6 percent of its 13F equity portfolio to ESXB.
With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Fourthstone LLC, managed by Phil Stone, assembled the most outsized position in Community Bankers Trust Corp. (NASDAQ:ESXB). Fourthstone LLC had $1.8 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0.1 million investment in the stock during the quarter.
Let’s go over hedge fund activity in other stocks similar to Community Bankers Trust Corp. (NASDAQ:ESXB). We will take a look at Resolute Forest Products Inc (NYSE:RFP), Genasys Inc. (NASDAQ:GNSS), Points International Ltd (NASDAQ:PCOM), and Oconee Federal Financial (NASDAQ:OFED). This group of stocks’ market valuations are similar to ESXB’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RFP | 9 | 43202 | -5 |
| GNSS | 6 | 11852 | 0 |
| PCOM | 10 | 18498 | 3 |
| OFED | 1 | 332 | 0 |
| Average | 6.5 | 18471 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.5 hedge funds with bullish positions and the average amount invested in these stocks was $18 million. That figure was $14 million in ESXB’s case. Points International Ltd (NASDAQ:PCOM) is the most popular stock in this table. On the other hand Oconee Federal Financial (NASDAQ:OFED) is the least popular one with only 1 bullish hedge fund positions. Community Bankers Trust Corp. (NASDAQ:ESXB) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th but beat the market by 14.2 percentage points. Unfortunately ESXB wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on ESXB were disappointed as the stock returned 21.6% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.
