Hedge funds run by legendary names like George Soros and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small caps are where they can generate significant outperformance. That’s why we pay special attention to hedge fund activity in these stocks.
BancFirst Corporation (NASDAQ:BANF) has experienced a decrease in enthusiasm from smart money recently. BANF was in 9 hedge funds’ portfolios at the end of June. There were 11 hedge funds in our database with BANF positions at the end of the previous quarter. Our calculations also showed that BANF 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.
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 flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a 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 check out the new hedge fund action regarding BancFirst Corporation (NASDAQ:BANF).
How have hedgies been trading BancFirst Corporation (NASDAQ:BANF)?
At Q2’s end, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -18% from the previous quarter. On the other hand, there were a total of 6 hedge funds with a bullish position in BANF a year ago. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Amy Minella’s Cardinal Capital has the biggest position in BancFirst Corporation (NASDAQ:BANF), worth close to $18.9 million, corresponding to 0.6% of its total 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, holding a $14.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining professional money managers that hold long positions consist of Israel Englander’s Millennium Management, Cliff Asness’s AQR Capital Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Since BancFirst Corporation (NASDAQ:BANF) has experienced falling interest from the aggregate hedge fund industry, we can see that there was a specific group of funds that decided to sell off their positions entirely in the second quarter. At the top of the heap, Roger Ibbotson’s Zebra Capital Management dropped the biggest stake of all the hedgies watched by Insider Monkey, comprising about $0.6 million in stock, and Paul Marshall and Ian Wace’s Marshall Wace LLP was right behind this move, as the fund dumped about $0.5 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 2 funds in the second quarter.
Let’s check out hedge fund activity in other stocks similar to BancFirst Corporation (NASDAQ:BANF). We will take a look at 21Vianet Group Inc (NASDAQ:VNET), Amkor Technology, Inc. (NASDAQ:AMKR), Jagged Peak Energy Inc. (NYSE:JAG), and Progress Software Corporation (NASDAQ:PRGS). This group of stocks’ market values are similar to BANF’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VNET | 17 | 51204 | -1 |
| AMKR | 19 | 73105 | -6 |
| JAG | 13 | 146861 | 1 |
| PRGS | 24 | 268304 | 0 |
| Average | 18.25 | 134869 | -1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.25 hedge funds with bullish positions and the average amount invested in these stocks was $135 million. That figure was $47 million in BANF’s case. Progress Software Corporation (NASDAQ:PRGS) is the most popular stock in this table. On the other hand Jagged Peak Energy Inc. (NYSE:JAG) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks BancFirst Corporation (NASDAQ:BANF) is even less popular than JAG. Hedge funds dodged a bullet by taking a bearish stance towards BANF. 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 BANF wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); BANF investors were disappointed as the stock returned 0.1% 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.
