After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of March 31st. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Signature Bank (NASDAQ:SBNY).
Is Signature Bank (NASDAQ:SBNY) an exceptional investment today? The best stock pickers were getting more optimistic. The number of bullish hedge fund positions went up by 12 recently. Signature Bank (NASDAQ:SBNY) was in 40 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic was previously 36. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that SBNY isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Robert Pohly of Samlyn Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind let’s take a look at the new hedge fund action surrounding Signature Bank (NASDAQ:SBNY).
Do Hedge Funds Think SBNY Is A Good Stock To Buy Now?
At first quarter’s end, a total of 40 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 43% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards SBNY over the last 23 quarters. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
More specifically, Citadel Investment Group was the largest shareholder of Signature Bank (NASDAQ:SBNY), with a stake worth $207.6 million reported as of the end of March. Trailing Citadel Investment Group was Point72 Asset Management, which amassed a stake valued at $99.7 million. EJF Capital, Rima Senvest Management, and Samlyn Capital 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 Toscafund Asset Management allocated the biggest weight to Signature Bank (NASDAQ:SBNY), around 6.78% of its 13F portfolio. EJF Capital is also relatively very bullish on the stock, setting aside 6.66 percent of its 13F equity portfolio to SBNY.
As industrywide interest jumped, specific money managers were breaking ground themselves. Samlyn Capital, managed by Robert Pohly, initiated the most valuable position in Signature Bank (NASDAQ:SBNY). Samlyn Capital had $83.1 million invested in the company at the end of the quarter. Clint Carlson’s Carlson Capital also initiated a $31.2 million position during the quarter. The following funds were also among the new SBNY investors: Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, Jeffrey Hoffner’s Engle Capital, and Dmitry Balyasny’s Balyasny Asset Management.
Let’s go over hedge fund activity in other stocks similar to Signature Bank (NASDAQ:SBNY). These stocks are Graco Inc. (NYSE:GGG), Atmos Energy Corporation (NYSE:ATO), Chegg Inc (NYSE:CHGG), Annaly Capital Management, Inc. (NYSE:NLY), Advance Auto Parts, Inc. (NYSE:AAP), AMERCO (NASDAQ:UHAL), and Darling Ingredients Inc. (NYSE:DAR). This group of stocks’ market valuations are closest to SBNY’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GGG | 25 | 327418 | 0 |
| ATO | 15 | 172475 | -10 |
| CHGG | 33 | 672189 | 0 |
| NLY | 15 | 140155 | -6 |
| AAP | 43 | 1284543 | 7 |
| UHAL | 23 | 661125 | 2 |
| DAR | 33 | 756667 | -3 |
| Average | 26.7 | 573510 | -1.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.7 hedge funds with bullish positions and the average amount invested in these stocks was $574 million. That figure was $926 million in SBNY’s case. Advance Auto Parts, Inc. (NYSE:AAP) is the most popular stock in this table. On the other hand Atmos Energy Corporation (NYSE:ATO) is the least popular one with only 15 bullish hedge fund positions. Signature Bank (NASDAQ:SBNY) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SBNY is 84.6. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 19.3% in 2021 through June 25th and still beat the market by 4.8 percentage points. Hedge funds were also right about betting on SBNY, though not to the same extent, as the stock returned 13.7% since Q1 (through June 25th) and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.
