We at Insider Monkey have gone over 738 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. In this article, we look at what those funds think of Hanmi Financial Corp (NASDAQ:HAFC) based on that data.
Hanmi Financial Corp (NASDAQ:HAFC) has experienced an increase in hedge fund interest in recent months. HAFC was in 12 hedge funds’ portfolios at the end of the first quarter of 2019. There were 10 hedge funds in our database with HAFC holdings at the end of the previous quarter. Our calculations also showed that hafc isn’t among the 30 most popular stocks among hedge funds.
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’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Noam Gottesman, GLG Partners
We’re going to check out the fresh hedge fund action surrounding Hanmi Financial Corp (NASDAQ:HAFC).
How have hedgies been trading Hanmi Financial Corp (NASDAQ:HAFC)?
At the end of the first quarter, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 20% from the fourth quarter of 2018. By comparison, 13 hedge funds held shares or bullish call options in HAFC a year ago. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in Hanmi Financial Corp (NASDAQ:HAFC), which was worth $20.2 million at the end of the first quarter. On the second spot was AQR Capital Management which amassed $3.9 million worth of shares. Moreover, Royce & Associates, D E Shaw, and GLG Partners were also bullish on Hanmi Financial Corp (NASDAQ:HAFC), allocating a large percentage of their portfolios to this stock.
As one would reasonably expect, specific money managers were leading the bulls’ herd. Millennium Management, managed by Israel Englander, initiated the largest position in Hanmi Financial Corp (NASDAQ:HAFC). Millennium Management had $1.6 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $0.5 million investment in the stock during the quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Hanmi Financial Corp (NASDAQ:HAFC) but similarly valued. These stocks are Construction Partners, Inc. (NASDAQ:ROAD), Osiris Therapeutics, Inc. (NASDAQ:OSIR), Apollo Medical Holdings, Inc. (NASDAQ:AMEH), and ADTRAN, Inc. (NASDAQ:ADTN). This group of stocks’ market valuations resemble HAFC’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ROAD | 8 | 13006 | 0 |
| OSIR | 13 | 55531 | 5 |
| AMEH | 3 | 851 | 0 |
| ADTN | 15 | 73032 | 0 |
| Average | 9.75 | 35605 | 1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.75 hedge funds with bullish positions and the average amount invested in these stocks was $36 million. That figure was $38 million in HAFC’s case. ADTRAN, Inc. (NASDAQ:ADTN) is the most popular stock in this table. On the other hand Apollo Medical Holdings, Inc. (NASDAQ:AMEH) is the least popular one with only 3 bullish hedge fund positions. Hanmi Financial Corp (NASDAQ:HAFC) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but 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 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately HAFC wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on HAFC were disappointed as the stock returned 1.5% during the same period 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 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
