We are still in an overall bull market and many stocks that smart money investors were piling into surged through the end of November. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 54% and 51% respectively. Hedge funds’ top 3 stock picks returned 41.7% this year and beat the S&P 500 ETFs by 14 percentage points. That’s a big deal.This is why following the smart money sentiment is a useful tool at identifying the next stock to invest in.
Is County Bancorp, Inc. (NASDAQ:ICBK) undervalued? Hedge funds are turning bullish. The number of long hedge fund positions increased by 1 in recent months. Our calculations also showed that ICBK isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). ICBK was in 6 hedge funds’ portfolios at the end of September. There were 5 hedge funds in our database with ICBK holdings 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 21st century investor’s toolkit there are a lot of gauges shareholders put to use to appraise their stock investments. A pair of the less utilized gauges are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the top picks of the best money managers can trounce the broader indices by a very impressive margin (see the details here).
Chuck Royce of Royce & Associates
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 gander at the latest hedge fund action encompassing County Bancorp, Inc. (NASDAQ:ICBK).
Hedge fund activity in County Bancorp, Inc. (NASDAQ:ICBK)
Heading into the fourth quarter of 2019, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 20% from the previous quarter. On the other hand, there were a total of 2 hedge funds with a bullish position in ICBK a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Tontine Asset Management was the largest shareholder of County Bancorp, Inc. (NASDAQ:ICBK), with a stake worth $6.1 million reported as of the end of September. Trailing Tontine Asset Management was Royce & Associates, which amassed a stake valued at $2.8 million. Renaissance Technologies, Ancora Advisors, and Millennium Management 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 Tontine Asset Management allocated the biggest weight to County Bancorp, Inc. (NASDAQ:ICBK), around 0.87% of its 13F portfolio. Ancora Advisors is also relatively very bullish on the stock, dishing out 0.03 percent of its 13F equity portfolio to ICBK.
There weren’t any hedge funds initiating brand new positions in the stock during the third quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as County Bancorp, Inc. (NASDAQ:ICBK) but similarly valued. We will take a look at iCAD Inc (NASDAQ:ICAD), Axcella Health Inc. (NASDAQ:AXLA), Adams Resources & Energy Inc (NYSE:AE), and Goodrich Petroleum Corporation (NYSE:GDP). This group of stocks’ market valuations match ICBK’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ICAD | 6 | 8038 | -2 |
| AXLA | 3 | 1069 | -1 |
| AE | 5 | 12371 | 0 |
| GDP | 6 | 24314 | 1 |
| Average | 5 | 11448 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $11 million. That figure was $11 million in ICBK’s case. iCAD Inc (NASDAQ:ICAD) is the most popular stock in this table. On the other hand Axcella Health Inc. (NASDAQ:AXLA) is the least popular one with only 3 bullish hedge fund positions. County Bancorp, Inc. (NASDAQ:ICBK) is not the most popular stock in this group but hedge fund interest is still above 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. Hedge funds were also right about betting on ICBK as the stock returned 22.3% during the fourth quarter (through the end of November) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
