In this article you are going to find out whether hedge funds think MVB Financial Corp. (NASDAQ:MVBF) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Is MVB Financial Corp. (NASDAQ:MVBF) a safe stock to buy now? Investors who are in the know are in an optimistic mood. The number of long hedge fund bets improved by 3 in recent months. Our calculations also showed that MVBF 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.
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 monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 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
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. Keeping this in mind let’s go over the fresh hedge fund action surrounding MVB Financial Corp. (NASDAQ:MVBF).
How are hedge funds trading MVB Financial Corp. (NASDAQ:MVBF)?
At Q1’s end, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 75% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards MVBF over the last 18 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, EJF Capital held the most valuable stake in MVB Financial Corp. (NASDAQ:MVBF), which was worth $14.4 million at the end of the third quarter. On the second spot was Second Curve Capital which amassed $2.8 million worth of shares. Renaissance Technologies, Citadel Investment Group, and Tontine Asset 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 Second Curve Capital allocated the biggest weight to MVB Financial Corp. (NASDAQ:MVBF), around 23% of its 13F portfolio. EJF Capital is also relatively very bullish on the stock, dishing out 3.03 percent of its 13F equity portfolio to MVBF.
With a general bullishness amongst the heavyweights, key hedge funds have jumped into MVB Financial Corp. (NASDAQ:MVBF) headfirst. Citadel Investment Group, managed by Ken Griffin, created the largest position in MVB Financial Corp. (NASDAQ:MVBF). Citadel Investment Group had $0.2 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $0.1 million position during the quarter. The only other fund with a new position in the stock is Chuck Royce’s Royce & Associates.
Let’s now review hedge fund activity in other stocks similar to MVB Financial Corp. (NASDAQ:MVBF). These stocks are SunOpta, Inc. (NASDAQ:STKL), Nature’s Sunshine Products Inc (NASDAQ:NATR), PICO Holdings Inc (NASDAQ:PICO), and Gencor Industries, Inc. (NASDAQ:GENC). This group of stocks’ market values are similar to MVBF’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| STKL | 12 | 59990 | -1 |
| NATR | 6 | 65608 | 0 |
| PICO | 13 | 20900 | 1 |
| GENC | 4 | 20616 | 1 |
| Average | 8.75 | 41779 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.75 hedge funds with bullish positions and the average amount invested in these stocks was $42 million. That figure was $18 million in MVBF’s case. PICO Holdings Inc (NASDAQ:PICO) is the most popular stock in this table. On the other hand Gencor Industries, Inc. (NASDAQ:GENC) is the least popular one with only 4 bullish hedge fund positions. MVB Financial Corp. (NASDAQ:MVBF) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and 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 and surpassed the market by 14.2 percentage points. Unfortunately MVBF wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); MVBF investors were disappointed as the stock returned 16.5% during the second quarter 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 most of these stocks already outperformed the market in 2020.
Follow Mvb Financial Corp (NASDAQ:MVBF)
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Disclosure: None. This article was originally published at Insider Monkey.
