With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter. One of these stocks was Enterprise Bancorp, Inc (NASDAQ:EBTC).
Enterprise Bancorp, Inc (NASDAQ:EBTC) investors should pay attention to an increase in activity from the world’s largest hedge funds recently. EBTC was in 4 hedge funds’ portfolios at the end of September. There were 1 hedge funds in our database with EBTC holdings at the end of the previous quarter. Our calculations also showed that EBTC 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.
Today there are a large number of signals stock traders can use to appraise publicly traded companies. A couple of the most under-the-radar signals are hedge fund and insider trading interest. We have shown that, historically, those who follow the best picks of the top money managers can outpace the broader indices by a solid amount (see the details here).
Roger Ibbotson of Zebra Capital 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. Keeping this in mind we’re going to take a look at the new hedge fund action surrounding Enterprise Bancorp, Inc (NASDAQ:EBTC).
How have hedgies been trading Enterprise Bancorp, Inc (NASDAQ:EBTC)?
At Q3’s end, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 300% from the previous quarter. On the other hand, there were a total of 2 hedge funds with a bullish position in EBTC a year ago. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies holds the number one position in Enterprise Bancorp, Inc (NASDAQ:EBTC). Renaissance Technologies has a $1.6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Renaissance Technologies’s heels is Millennium Management, managed by Israel Englander, which holds a $0.3 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining professional money managers that hold long positions consist of Ken Griffin’s Citadel Investment Group, Roger Ibbotson’s Zebra Capital Management and . In terms of the portfolio weights assigned to each position Zebra Capital Management allocated the biggest weight to Enterprise Bancorp, Inc (NASDAQ:EBTC), around 0.24% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, earmarking 0.0014 percent of its 13F equity portfolio to EBTC.
As aggregate interest increased, key money managers were leading the bulls’ herd. Millennium Management, managed by Israel Englander, created the largest position in Enterprise Bancorp, Inc (NASDAQ:EBTC). Millennium Management had $0.3 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0.2 million position during the quarter. The only other fund with a new position in the stock is Roger Ibbotson’s Zebra Capital Management.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Enterprise Bancorp, Inc (NASDAQ:EBTC) but similarly valued. These stocks are Guaranty Bancshares, Inc. (NASDAQ:GNTY), Macatawa Bank Corporation (NASDAQ:MCBC), Agenus Inc (NASDAQ:AGEN), and Calix Inc (NYSE:CALX). All of these stocks’ market caps resemble EBTC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GNTY | 4 | 4311 | 1 |
| MCBC | 7 | 26349 | 2 |
| AGEN | 8 | 7665 | 2 |
| CALX | 14 | 82824 | 0 |
| Average | 8.25 | 30287 | 1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.25 hedge funds with bullish positions and the average amount invested in these stocks was $30 million. That figure was $2 million in EBTC’s case. Calix Inc (NYSE:CALX) is the most popular stock in this table. On the other hand Guaranty Bancshares, Inc. (NASDAQ:GNTY) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Enterprise Bancorp, Inc (NASDAQ:EBTC) is even less popular than GNTY. 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 EBTC, though not to the same extent, as the stock returned 6.9% during the fourth quarter (through 11/30) and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.