Is BancFirst Corporation (NASDAQ:BANF) a good bet right now? We like to analyze hedge fund sentiment before conducting days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
BancFirst Corporation (NASDAQ:BANF) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 9 hedge funds’ portfolios at the end of the third quarter of 2019. At the end of this article we will also compare BANF to other stocks including Varonis Systems Inc (NASDAQ:VRNS), BrightView Holdings, Inc. (NYSE:BV), and Healthcare Services Group, Inc. (NASDAQ:HCSG) to get a better sense of its popularity.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In today’s marketplace there are many metrics stock traders can use to appraise publicly traded companies. Two of the less utilized metrics are hedge fund and insider trading moves. We have shown that, historically, those who follow the best picks of the elite investment managers can outperform the broader indices by a significant amount (see the details here).
Paul Marshall of Marshall Wace
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. 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 also rely on the best performing hedge funds‘ buy/sell signals. Let’s take a look at the recent hedge fund action regarding BancFirst Corporation (NASDAQ:BANF).
How have hedgies been trading BancFirst Corporation (NASDAQ:BANF)?
Heading into the fourth quarter of 2019, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the second quarter of 2019. Below, you can check out the change in hedge fund sentiment towards BANF over the last 17 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Cardinal Capital, managed by Amy Minella, holds the number one position in BancFirst Corporation (NASDAQ:BANF). Cardinal Capital has a $18.3 million position in the stock, comprising 0.6% of its 13F portfolio. On Cardinal Capital’s heels is Renaissance Technologies, which holds a $13.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism contain Cliff Asness’s AQR Capital Management, Israel Englander’s Millennium Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. In terms of the portfolio weights assigned to each position Cardinal Capital allocated the biggest weight to BancFirst Corporation (NASDAQ:BANF), around 0.6% of its 13F portfolio. Winton Capital Management is also relatively very bullish on the stock, setting aside 0.01 percent of its 13F equity portfolio to BANF.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: D E Shaw. 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 only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Marshall Wace).
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as BancFirst Corporation (NASDAQ:BANF) but similarly valued. We will take a look at Varonis Systems Inc (NASDAQ:VRNS), BrightView Holdings, Inc. (NYSE:BV), Healthcare Services Group, Inc. (NASDAQ:HCSG), and Freshpet Inc (NASDAQ:FRPT). All of these stocks’ market caps match BANF’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VRNS | 23 | 409397 | -1 |
| BV | 10 | 284642 | 2 |
| HCSG | 16 | 85990 | -4 |
| FRPT | 18 | 126120 | -6 |
| Average | 16.75 | 226537 | -2.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.75 hedge funds with bullish positions and the average amount invested in these stocks was $227 million. That figure was $47 million in BANF’s case. Varonis Systems Inc (NASDAQ:VRNS) is the most popular stock in this table. On the other hand BrightView Holdings, Inc. (NYSE:BV) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks BancFirst Corporation (NASDAQ:BANF) is even less popular than BV. 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 BANF, though not to the same extent, as the stock returned 6.6% during the fourth quarter (through 11/30) and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
