After several tireless days we have finished crunching the numbers from nearly 750 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 June 28. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Eagle Bancorp, Inc. (NASDAQ:EGBN).
Eagle Bancorp, Inc. (NASDAQ:EGBN) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 11 hedge funds’ portfolios at the end of June. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Northwest Bancshares, Inc. (NASDAQ:NWBI), Diodes Incorporated (NASDAQ:DIOD), and Scientific Games Corporation (NASDAQ:SGMS) to gather more data points. Our calculations also showed that EGBN isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 25.7% through September 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s take a glance at the recent hedge fund action regarding Eagle Bancorp, Inc. (NASDAQ:EGBN).
What have hedge funds been doing with Eagle Bancorp, Inc. (NASDAQ:EGBN)?
At the end of the second quarter, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the first quarter of 2019. Below, you can check out the change in hedge fund sentiment towards EGBN over the last 16 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Eagle Bancorp, Inc. (NASDAQ:EGBN) was held by Millennium Management, which reported holding $28.8 million worth of stock at the end of March. It was followed by GAMCO Investors with a $5.4 million position. Other investors bullish on the company included Second Curve Capital, Fisher Asset Management, and Basswood Capital.
Judging by the fact that Eagle Bancorp, Inc. (NASDAQ:EGBN) has witnessed declining sentiment from the smart money, we can see that there were a few funds who were dropping their full holdings heading into Q3. At the top of the heap, Paul Marshall and Ian Wace’s Marshall Wace LLP dumped the largest position of all the hedgies monitored by Insider Monkey, worth an estimated $0.9 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also dumped its stock, about $0.5 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Eagle Bancorp, Inc. (NASDAQ:EGBN) but similarly valued. We will take a look at Northwest Bancshares, Inc. (NASDAQ:NWBI), Diodes Incorporated (NASDAQ:DIOD), Scientific Games Corporation (NASDAQ:SGMS), and Compass Minerals International, Inc. (NYSE:CMP). All of these stocks’ market caps resemble EGBN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NWBI | 13 | 69252 | 2 |
| DIOD | 18 | 114161 | -1 |
| SGMS | 27 | 578766 | -1 |
| CMP | 16 | 81209 | 3 |
| Average | 18.5 | 210847 | 0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.5 hedge funds with bullish positions and the average amount invested in these stocks was $211 million. That figure was $48 million in EGBN’s case. Scientific Games Corporation (NASDAQ:SGMS) is the most popular stock in this table. On the other hand Northwest Bancshares, Inc. (NASDAQ:NWBI) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Eagle Bancorp, Inc. (NASDAQ:EGBN) is even less popular than NWBI. Hedge funds dodged a bullet by taking a bearish stance towards EGBN. Our calculations showed that the top 20 most popular hedge fund stocks returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately EGBN wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); EGBN investors were disappointed as the stock returned -17.6% during the third 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 many of these stocks already outperformed the market so far in 2019.
Disclosure: None. This article was originally published at Insider Monkey.
