Here is What Hedge Funds Think About MetroCity Bankshares, Inc. (MCBS)

With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter of 2021. One of these stocks was MetroCity Bankshares, Inc. (NASDAQ:MCBS).

MetroCity Bankshares, Inc. (NASDAQ:MCBS) has seen an increase in enthusiasm from smart money in recent months. MetroCity Bankshares, Inc. (NASDAQ:MCBS) was in 3 hedge funds’ portfolios at the end of March. The all time high for this statistic is 4. There were 1 hedge funds in our database with MCBS holdings at the end of December. Our calculations also showed that MCBS 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.

David Siegel of Two Sigma Advisors

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $26 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. 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 gander at the new hedge fund action encompassing MetroCity Bankshares, Inc. (NASDAQ:MCBS).

Do Hedge Funds Think MCBS Is A Good Stock To Buy Now?

At Q1’s end, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 200% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards MCBS over the last 23 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Two Sigma Advisors, managed by John Overdeck and David Siegel, holds the most valuable position in MetroCity Bankshares, Inc. (NASDAQ:MCBS). Two Sigma Advisors has a $0.4 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Two Sigma Advisors’s heels is Citadel Investment Group, managed by Ken Griffin, which holds a $0.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. In terms of the portfolio weights assigned to each position Zebra Capital Management allocated the biggest weight to MetroCity Bankshares, Inc. (NASDAQ:MCBS), around 0.23% of its 13F portfolio. Two Sigma Advisors is also relatively very bullish on the stock, dishing out 0.001 percent of its 13F equity portfolio to MCBS.

As aggregate interest increased, some big names have jumped into MetroCity Bankshares, Inc. (NASDAQ:MCBS) headfirst. Two Sigma Advisors, managed by John Overdeck and David Siegel, assembled the biggest position in MetroCity Bankshares, Inc. (NASDAQ:MCBS). Two Sigma Advisors had $0.4 million invested in the company at the end of the quarter. Roger Ibbotson’s Zebra Capital Management also made a $0.2 million investment in the stock during the quarter.

Let’s check out hedge fund activity in other stocks similar to MetroCity Bankshares, Inc. (NASDAQ:MCBS). We will take a look at TravelCenters of America Inc. (NYSE:TA), Kimbell Royalty Partners (NYSE:KRP), Retail Value Inc. (NYSE:RVI), NI Holdings, Inc. (NASDAQ:NODK), BioDelivery Sciences International, Inc. (NASDAQ:BDSI), Trinity Capital Inc. (NASDAQ:TRIN), and Rocky Brands, Inc. (NASDAQ:RCKY). This group of stocks’ market caps match MCBS’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 10.3 hedge funds with bullish positions and the average amount invested in these stocks was $47 million. That figure was $1 million in MCBS’s case. BioDelivery Sciences International, Inc. (NASDAQ:BDSI) is the most popular stock in this table. On the other hand Kimbell Royalty Partners (NYSE:KRP) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks MetroCity Bankshares, Inc. (NASDAQ:MCBS) is even less popular than KRP. Our overall hedge fund sentiment score for MCBS is 29.5. 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. Hedge funds clearly dropped the ball on MCBS as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. 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 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. A small number of hedge funds were also right about betting on MCBS as the stock returned 19.3% since Q1 (through June 11th) and outperformed the market by an even larger margin.

Disclosure: None. This article was originally published at Insider Monkey.

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