Is HomeStreet Inc (NASDAQ:HMST) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
HomeStreet Inc (NASDAQ:HMST) investors should be aware of an increase in hedge fund interest recently. HMST was in 10 hedge funds’ portfolios at the end of the first quarter of 2019. There were 7 hedge funds in our database with HMST positions at the end of the previous quarter. Our calculations also showed that HMST isn’t among the 30 most popular stocks among hedge funds.
To most stock holders, hedge funds are perceived as slow, outdated investment vehicles of the past. While there are over 8000 funds in operation today, We look at the moguls of this club, approximately 750 funds. These money managers direct the lion’s share of the smart money’s total asset base, and by monitoring their inimitable stock picks, Insider Monkey has deciphered numerous investment strategies that have historically outpaced Mr. Market. Insider Monkey’s flagship hedge fund strategy surpassed the S&P 500 index by around 5 percentage points per annum since its inception in May 2014 through June 18th. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 28.2% since February 2017 (through June 18th) even though the market was up nearly 30% during the same period. We just shared a list of 5 short targets in our latest quarterly update and they are already down an average of 8.2% in a month whereas our long picks outperformed the market by 2.5 percentage points in this volatile 5 week period (our long picks also beat the market by 15 percentage points so far this year).
Let’s check out the recent hedge fund action encompassing HomeStreet Inc (NASDAQ:HMST).
What have hedge funds been doing with HomeStreet Inc (NASDAQ:HMST)?
Heading into the second quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 43% from the fourth quarter of 2018. Below, you can check out the change in hedge fund sentiment towards HMST over the last 15 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in HomeStreet Inc (NASDAQ:HMST) was held by Millennium Management, which reported holding $3.5 million worth of stock at the end of March. It was followed by Renaissance Technologies with a $2.7 million position. Other investors bullish on the company included Marshall Wace LLP, D E Shaw, and Manatuck Hill Partners.
As aggregate interest increased, key money managers have jumped into HomeStreet Inc (NASDAQ:HMST) headfirst. Renaissance Technologies, managed by Jim Simons, created the most valuable position in HomeStreet Inc (NASDAQ:HMST). Renaissance Technologies had $2.7 million invested in the company at the end of the quarter. Mark Broach’s Manatuck Hill Partners also initiated a $1.5 million position during the quarter. The only other fund with a brand new HMST position is Brian C. Freckmann’s Lyon Street Capital.
Let’s now take a look at hedge fund activity in other stocks similar to HomeStreet Inc (NASDAQ:HMST). We will take a look at JinkoSolar Holding Co., Ltd. (NYSE:JKS), Rudolph Technologies Inc (NYSE:RTEC), Voyager Therapeutics, Inc. (NASDAQ:VYGR), and Eagle Pharmaceuticals Inc (NASDAQ:EGRX). This group of stocks’ market values are similar to HMST’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| JKS | 6 | 5725 | 0 |
| RTEC | 12 | 82738 | -2 |
| VYGR | 18 | 153216 | 0 |
| EGRX | 23 | 164998 | 2 |
| Average | 14.75 | 101669 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.75 hedge funds with bullish positions and the average amount invested in these stocks was $102 million. That figure was $16 million in HMST’s case. Eagle Pharmaceuticals Inc (NASDAQ:EGRX) is the most popular stock in this table. On the other hand JinkoSolar Holding Co., Ltd. (NYSE:JKS) is the least popular one with only 6 bullish hedge fund positions. HomeStreet Inc (NASDAQ:HMST) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. A small number of hedge funds were also right about betting on HMST as the stock returned 16.6% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
