Does First Midwest Bancorp Inc (NASDAQ:FMBI) represent a good buying opportunity at the moment? Let’s briefly check the hedge fund interest towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on satellite photos and other research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail inconceivably on some occasions, but net net their stock picks have been generating superior risk-adjusted returns on average over the years.
First Midwest Bancorp Inc (NASDAQ:FMBI) investors should pay attention to an increase in activity from the world’s largest hedge funds recently. FMBI was in 12 hedge funds’ portfolios at the end of December. There were 8 hedge funds in our database with FMBI holdings at the end of the previous quarter. Our calculations also showed that fmbi isn’t among the 30 most popular stocks among hedge funds.
Today there are a multitude of methods investors employ to evaluate their holdings. Two of the most under-the-radar methods are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the top picks of the best hedge fund managers can beat the S&P 500 by a significant margin (see the details here).
We’re going to take a peek at the new hedge fund action encompassing First Midwest Bancorp Inc (NASDAQ:FMBI).
How are hedge funds trading First Midwest Bancorp Inc (NASDAQ:FMBI)?
Heading into the first quarter of 2019, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 50% from one quarter earlier. By comparison, 8 hedge funds held shares or bullish call options in FMBI a year ago. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
The largest stake in First Midwest Bancorp Inc (NASDAQ:FMBI) was held by Pzena Investment Management, which reported holding $29.1 million worth of stock at the end of September. It was followed by Millennium Management with a $9.9 million position. Other investors bullish on the company included Renaissance Technologies, D E Shaw, and Marshall Wace LLP.
Now, specific money managers have been driving this bullishness. Renaissance Technologies, managed by Jim Simons, assembled the most outsized position in First Midwest Bancorp Inc (NASDAQ:FMBI). Renaissance Technologies had $6.5 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also made a $4.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Matthew Lindenbaum’s Basswood Capital, Dmitry Balyasny’s Balyasny Asset Management, and George Zweig, Shane Haas and Ravi Chander’s Signition LP.
Let’s also examine hedge fund activity in other stocks similar to First Midwest Bancorp Inc (NASDAQ:FMBI). We will take a look at Werner Enterprises, Inc. (NASDAQ:WERN), Cogent Communications Holdings, Inc. (NASDAQ:CCOI), Apergy Corporation (NYSE:APY), and Vonage Holdings Corp. (NYSE:VG). This group of stocks’ market valuations are similar to FMBI’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WERN | 14 | 104958 | -3 |
| CCOI | 17 | 219059 | 5 |
| APY | 13 | 115501 | -7 |
| VG | 22 | 154896 | -4 |
| Average | 16.5 | 148604 | -2.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.5 hedge funds with bullish positions and the average amount invested in these stocks was $149 million. That figure was $65 million in FMBI’s case. Vonage Holdings Corp. (NYSE:VG) is the most popular stock in this table. On the other hand Apergy Corporation (NYSE:APY) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks First Midwest Bancorp Inc (NASDAQ:FMBI) is even less popular than APY. Hedge funds dodged a bullet by taking a bearish stance towards FMBI. Our calculations showed that the top 15 most popular hedge fund stocks returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately FMBI wasn’t nearly as popular as these 15 stock (hedge fund sentiment was very bearish); FMBI investors were disappointed as the stock returned 4.4% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
