Concerns over rising interest rates and expected further rate increases have hit several stocks hard during the fourth quarter of 2018. Trends reversed 180 degrees in 2019 amid Powell’s pivot and optimistic expectations towards a trade deal with China. Hedge funds and institutional investors tracked by Insider Monkey usually invest a disproportionate amount of their portfolios in smaller cap stocks. We have been receiving indications that hedge funds were increasing their overall exposure in the third quarter and this is one of the factors behind the recent movements in major indices. In this article, we will take a closer look at hedge fund sentiment towards Riverview Bancorp, Inc. (NASDAQ:RVSB).
Is Riverview Bancorp, Inc. (NASDAQ:RVSB) a marvelous investment today? Money managers are buying. The number of bullish hedge fund positions rose by 2 lately. Our calculations also showed that RVSB isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). RVSB was in 10 hedge funds’ portfolios at the end of the third quarter of 2019. There were 8 hedge funds in our database with RVSB 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 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.
John Overdeck of Two Sigma Advisors
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 based on an under-the-radar fund manager’s investor letter and the stock gained 20 percent. We’re going to take a glance at the recent hedge fund action encompassing Riverview Bancorp, Inc. (NASDAQ:RVSB).
What have hedge funds been doing with Riverview Bancorp, Inc. (NASDAQ:RVSB)?
At Q3’s end, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of 25% from the previous quarter. The graph below displays the number of hedge funds with bullish position in RVSB over the last 17 quarters. 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, Renaissance Technologies was the largest shareholder of Riverview Bancorp, Inc. (NASDAQ:RVSB), with a stake worth $3.4 million reported as of the end of September. Trailing Renaissance Technologies was Arrowstreet Capital, which amassed a stake valued at $0.9 million. Millennium Management, Winton Capital Management, and Two Sigma 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 Zebra Capital Management allocated the biggest weight to Riverview Bancorp, Inc. (NASDAQ:RVSB), around 0.12% of its 13F portfolio. Bailard Inc is also relatively very bullish on the stock, dishing out 0.01 percent of its 13F equity portfolio to RVSB.
As industrywide interest jumped, specific money managers have jumped into Riverview Bancorp, Inc. (NASDAQ:RVSB) headfirst. Winton Capital Management, managed by David Harding, established the biggest position in Riverview Bancorp, Inc. (NASDAQ:RVSB). Winton Capital Management had $0.5 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace also made a $0.2 million investment in the stock during the quarter.
Let’s check out hedge fund activity in other stocks similar to Riverview Bancorp, Inc. (NASDAQ:RVSB). We will take a look at Pieris Pharmaceuticals, Inc. (NASDAQ:PIRS), Hill International Inc (NYSE:HIL), SandRidge Energy Inc. (NYSE:SD), and Pingtan Marine Enterprise Ltd. (NASDAQ:PME). This group of stocks’ market values are closest to RVSB’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PIRS | 11 | 38716 | -1 |
| HIL | 12 | 49032 | 2 |
| SD | 18 | 53114 | 0 |
| PME | 2 | 54 | 1 |
| Average | 10.75 | 35229 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $35 million. That figure was $6 million in RVSB’s case. SandRidge Energy Inc. (NYSE:SD) is the most popular stock in this table. On the other hand Pingtan Marine Enterprise Ltd. (NASDAQ:PME) is the least popular one with only 2 bullish hedge fund positions. Riverview Bancorp, Inc. (NASDAQ:RVSB) 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 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. Unfortunately RVSB wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); RVSB investors were disappointed as the stock returned -1.4% during the first two months of the fourth 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 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
