With the third-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 fourth quarter. One of these stocks was The Bancorp, Inc. (NASDAQ:TBBK).
Is The Bancorp, Inc. (NASDAQ:TBBK) a healthy stock for your portfolio? Money managers are taking a pessimistic view. The number of bullish hedge fund positions decreased by 5 in recent months. 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 NQ Mobile Inc (ADR) (NYSE:NQ), Federal Agricultural Mortgage Corp. (NYSE:AGM), and Exar Corporation (NASDAQ:EXAR) to gather more data points.
Follow Bancorp Inc. (NASDAQ:TBBK)
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According to most shareholders, hedge funds are perceived as worthless, outdated investment tools of yesteryear. While there are over 8000 funds in operation today, Our experts hone in on the leaders of this group, around 700 funds. These hedge fund managers handle the lion’s share of the smart money’s total capital, and by keeping track of their top stock picks, Insider Monkey has formulated a few investment strategies that have historically surpassed the market. Insider Monkey’s small-cap hedge fund strategy outstripped the S&P 500 index by 12 percentage points a year for a decade in their back tests.
With all of this in mind, we’re going to take a look at the fresh action surrounding The Bancorp, Inc. (NASDAQ:TBBK).
How are hedge funds trading The Bancorp, Inc. (NASDAQ:TBBK)?
At the end of the third quarter, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -31% from the second quarter. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Second Curve Capital, managed by Tom Brown, holds the number one position in The Bancorp, Inc. (NASDAQ:TBBK). Second Curve Capital has a $18.4 million position in the stock, comprising 8.3% of its 13F portfolio. Sitting at the No. 2 spot is Robert I. Usdan and Wayne K. Goldstein of Endicott Management, with a $12.6 million position; the fund has 4.7% of its 13F portfolio invested in the stock. Remaining peers that hold long positions comprise Wilmot B. Harkey and Daniel Mack’s Nantahala Capital Management, Michael Price’s MFP Investors and Israel Englander’s Millennium Management.
Due to the fact that The Bancorp, Inc. (NASDAQ:TBBK) has experienced a declining sentiment from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of hedge funds that slashed their entire stakes heading into Q4. At the top of the heap, William Black’s Consector Capital cut the biggest investment of all the hedgies monitored by Insider Monkey, valued at about $6.5 million in stock, and Joseph A. Jolson’s Harvest Capital Strategies was right behind this move, as the fund cut about $0.4 million worth of shares. These transactions are important to note, as aggregate hedge fund interest was cut by 5 funds heading into Q4.
Let’s now review hedge fund activity in other stocks similar to The Bancorp, Inc. (NASDAQ:TBBK). These stocks are NQ Mobile Inc (ADR) (NYSE:NQ), Federal Agricultural Mortgage Corp. (NYSE:AGM), Exar Corporation (NASDAQ:EXAR), and Aerohive Networks Inc (NYSE:HIVE). This group of stocks’ market valuations are closest to TBBK’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NQ | 8 | 8165 | -3 |
| AGM | 6 | 7167 | -1 |
| EXAR | 12 | 51749 | -5 |
| HIVE | 7 | 29488 | -1 |
As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $24 million, which is below the $50 million figure in TBBK’s case. Exar Corporation (NASDAQ:EXAR) is the most popular stock in this table, while Federal Agricultural Mortgage Corp. (NYSE:AGM) is the least popular one with only 6 bullish hedge fund positions. The Bancorp, Inc. (NASDAQ:TBBK) 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. In this regard EXAR might be a better candidate to consider looking into.
