We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of First Northwest Bancorp (NASDAQ:FNWB) based on that data.
Is First Northwest Bancorp (NASDAQ:FNWB) ready to rally soon? The smart money is selling. The number of long hedge fund bets went down by 1 lately. Our calculations also showed that FNWB 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). FNWB was in 3 hedge funds’ portfolios at the end of the first quarter of 2020. There were 4 hedge funds in our database with FNWB positions at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are tons of methods shareholders use to value publicly traded companies. A pair of the less known methods are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the elite hedge fund managers can outpace the S&P 500 by a healthy amount (see the details here).
David Harding of Winton Capital Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. We interview hedge fund managers and ask them about their best ideas. You can watch our latest hedge fund manager interview here and find out the name of the large-cap healthcare stock that Sio Capital’s Michael Castor expects to double. 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 S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to review the recent hedge fund action encompassing First Northwest Bancorp (NASDAQ:FNWB).
What does smart money think about First Northwest Bancorp (NASDAQ:FNWB)?
At the end of the first quarter, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -25% from the previous quarter. By comparison, 2 hedge funds held shares or bullish call options in FNWB a year ago. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
More specifically, Private Capital Management was the largest shareholder of First Northwest Bancorp (NASDAQ:FNWB), with a stake worth $7.8 million reported as of the end of September. Trailing Private Capital Management was Renaissance Technologies, which amassed a stake valued at $5 million. Winton Capital Management was 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 Private Capital Management allocated the biggest weight to First Northwest Bancorp (NASDAQ:FNWB), around 2.45% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, designating 0.0049 percent of its 13F equity portfolio to FNWB.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Millennium Management. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because none of the 750+ hedge funds tracked by Insider Monkey identified FNWB as a viable investment and initiated a position in the stock.
Let’s now review hedge fund activity in other stocks similar to First Northwest Bancorp (NASDAQ:FNWB). We will take a look at Eagle Bancorp Montana Inc (NASDAQ:EBMT), Orion Energy Systems, Inc. (NYSE:OESX), First Western Financial, Inc. (NASDAQ:MYFW), and Mackinac Financial Corporation (NASDAQ:MFNC). This group of stocks’ market values match FNWB’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EBMT | 7 | 12532 | -1 |
| OESX | 8 | 12154 | 0 |
| MYFW | 5 | 7992 | 0 |
| MFNC | 5 | 8683 | 1 |
| Average | 6.25 | 10340 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.25 hedge funds with bullish positions and the average amount invested in these stocks was $10 million. That figure was $13 million in FNWB’s case. Orion Energy Systems, Inc. (NYSE:OESX) is the most popular stock in this table. On the other hand First Western Financial, Inc. (NASDAQ:MYFW) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks First Northwest Bancorp (NASDAQ:FNWB) is even less popular than MYFW. 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 7.9% in 2020 through May 22nd but managed to beat the market by 15.6 percentage points. A small number of hedge funds were also right about betting on FNWB, though not to the same extent, as the stock returned 14.9% during the second quarter (through May 22nd) and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
