The 700+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Flagstar Bancorp Inc (NYSE:FBC).
Is Flagstar Bancorp Inc (NYSE:FBC) worth your attention right now? Money managers are in a bullish mood. The number of long hedge fund bets rose by 2 lately. Our calculations also showed that FBC isn’t among the 30 most popular stocks among hedge funds. FBC was in 14 hedge funds’ portfolios at the end of the first quarter of 2019. There were 12 hedge funds in our database with FBC holdings at the end of the previous quarter.
In the financial world there are plenty of methods investors have at their disposal to value their holdings. Two of the most under-the-radar methods are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the top picks of the best fund managers can outperform their index-focused peers by a solid margin (see the details here).
We’re going to take a gander at the fresh hedge fund action regarding Flagstar Bancorp Inc (NYSE:FBC).
How have hedgies been trading Flagstar Bancorp Inc (NYSE:FBC)?
At Q1’s end, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in FBC over the last 15 quarters. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
More specifically, GoldenTree Asset Management was the largest shareholder of Flagstar Bancorp Inc (NYSE:FBC), with a stake worth $23.5 million reported as of the end of March. Trailing GoldenTree Asset Management was Renaissance Technologies, which amassed a stake valued at $16.4 million. D E Shaw, Millennium Management, and Balyasny Asset Management were also very fond of the stock, giving the stock large weights in their portfolios.
As industrywide interest jumped, specific money managers have jumped into Flagstar Bancorp Inc (NYSE:FBC) headfirst. Second Curve Capital, managed by Tom Brown, created the largest position in Flagstar Bancorp Inc (NYSE:FBC). Second Curve Capital had $4.6 million invested in the company at the end of the quarter. Ravi Chopra’s Azora Capital also made a $3.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Benjamin A. Smith’s Laurion Capital Management, Ken Griffin’s Citadel Investment Group, and David Harding’s Winton Capital Management.
Let’s go over hedge fund activity in other stocks similar to Flagstar Bancorp Inc (NYSE:FBC). These stocks are Enanta Pharmaceuticals Inc (NASDAQ:ENTA), Verra Mobility Corporation (NASDAQ:VRRM), ProAssurance Corporation (NYSE:PRA), and LivePerson, Inc. (NASDAQ:LPSN). All of these stocks’ market caps are closest to FBC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ENTA | 20 | 290378 | 0 |
| VRRM | 14 | 187599 | 1 |
| PRA | 14 | 153430 | 1 |
| LPSN | 21 | 239043 | 4 |
| Average | 17.25 | 217613 | 1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.25 hedge funds with bullish positions and the average amount invested in these stocks was $218 million. That figure was $78 million in FBC’s case. LivePerson, Inc. (NASDAQ:LPSN) is the most popular stock in this table. On the other hand Verra Mobility Corporation (NASDAQ:VRRM) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks Flagstar Bancorp Inc (NYSE:FBC) is even less popular than VRRM. Hedge funds dodged a bullet by taking a bearish stance towards FBC. Our calculations showed that the top 20 most popular hedge fund stocks returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately FBC wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); FBC investors were disappointed as the stock returned -1.6% during the same time frame 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 the second quarter.
Disclosure: None. This article was originally published at Insider Monkey.
