Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 750 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about The First of Long Island Corporation (NASDAQ:FLIC).
Is The First of Long Island Corporation (NASDAQ:FLIC) a good investment today? Hedge funds are getting less optimistic. The number of long hedge fund bets went down by 3 recently. Our calculations also showed that flic isn’t among the 30 most popular stocks among hedge funds.
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 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 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.
We’re going to review the key hedge fund action surrounding The First of Long Island Corporation (NASDAQ:FLIC).
How are hedge funds trading The First of Long Island Corporation (NASDAQ:FLIC)?
At the end of the fourth quarter, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a change of -25% from one quarter earlier. By comparison, 5 hedge funds held shares or bullish call options in FLIC a year ago. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
The largest stake in The First of Long Island Corporation (NASDAQ:FLIC) was held by Renaissance Technologies, which reported holding $11.5 million worth of stock at the end of December. It was followed by Diamond Hill Capital with a $10.5 million position. Other investors bullish on the company included Basswood Capital, Millennium Management, and Chilton Investment Company.
Judging by the fact that The First of Long Island Corporation (NASDAQ:FLIC) has faced falling interest from the smart money, it’s easy to see that there exists a select few hedge funds who sold off their positions entirely by the end of the third quarter. Intriguingly, Ken Griffin’s Citadel Investment Group dumped the biggest stake of the 700 funds followed by Insider Monkey, worth about $0.8 million in stock. Cliff Asness’s fund, AQR Capital Management, also cut its stock, about $0.6 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 3 funds by the end of the third quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as The First of Long Island Corporation (NASDAQ:FLIC) but similarly valued. These stocks are China Yuchai International Limited (NYSE:CYD), Ennis, Inc. (NYSE:EBF), OrthoPediatrics Corp. (NASDAQ:KIDS), and Eidos Therapeutics, Inc. (NASDAQ:EIDX). This group of stocks’ market values are similar to FLIC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CYD | 8 | 54989 | 0 |
| EBF | 12 | 65136 | 1 |
| KIDS | 5 | 29048 | -2 |
| EIDX | 8 | 116233 | -6 |
| Average | 8.25 | 66352 | -1.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.25 hedge funds with bullish positions and the average amount invested in these stocks was $66 million. That figure was $41 million in FLIC’s case. Ennis, Inc. (NYSE:EBF) is the most popular stock in this table. On the other hand OrthoPediatrics Corp. (NASDAQ:KIDS) is the least popular one with only 5 bullish hedge fund positions. The First of Long Island Corporation (NASDAQ:FLIC) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately FLIC wasn’t nearly as popular as these 15 stock and hedge funds that were betting on FLIC were disappointed as the stock returned 15.3% 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.
