The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their December 31 holdings, data that is available nowhere else. Should you consider Independent Bank Corp (NASDAQ:INDB) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is Independent Bank Corp (NASDAQ:INDB) a buy right now? The smart money is getting more optimistic. The number of bullish hedge fund positions inched up by 2 in recent months. Our calculations also showed that indb isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s review the new hedge fund action encompassing Independent Bank Corp (NASDAQ:INDB).
How have hedgies been trading Independent Bank Corp (NASDAQ:INDB)?
Heading into the first quarter of 2019, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a change of 29% from the previous quarter. On the other hand, there were a total of 8 hedge funds with a bullish position in INDB a year ago. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
Among these funds, Fisher Asset Management held the most valuable stake in Independent Bank Corp (NASDAQ:INDB), which was worth $4.5 million at the end of the third quarter. On the second spot was Balyasny Asset Management which amassed $2.7 million worth of shares. Moreover, AQR Capital Management, D E Shaw, and Renaissance Technologies were also bullish on Independent Bank Corp (NASDAQ:INDB), allocating a large percentage of their portfolios to this stock.
As aggregate interest increased, some big names were leading the bulls’ herd. Balyasny Asset Management, managed by Dmitry Balyasny, created the largest position in Independent Bank Corp (NASDAQ:INDB). Balyasny Asset Management had $2.7 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also initiated a $0.6 million position during the quarter. The only other fund with a new position in the stock is Paul Marshall and Ian Wace’s Marshall Wace LLP.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Independent Bank Corp (NASDAQ:INDB) but similarly valued. We will take a look at The Cheesecake Factory Incorporated (NASDAQ:CAKE), Dana Incorporated (NYSE:DAN), Imperva Inc (NYSE:IMPV), and Otter Tail Corporation (NASDAQ:OTTR). This group of stocks’ market valuations match INDB’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CAKE | 21 | 176981 | 0 |
| DAN | 28 | 279360 | 0 |
| IMPV | 27 | 543478 | -2 |
| OTTR | 12 | 70971 | 3 |
| Average | 22 | 267698 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $268 million. That figure was $12 million in INDB’s case. Dana Incorporated (NYSE:DAN) is the most popular stock in this table. On the other hand Otter Tail Corporation (NASDAQ:OTTR) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Independent Bank Corp (NASDAQ:INDB) is even less popular than OTTR. Hedge funds dodged a bullet by taking a bearish stance towards INDB. 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 INDB wasn’t nearly as popular as these 15 stock (hedge fund sentiment was very bearish); INDB investors were disappointed as the stock returned 14.4% 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.
