Is BancorpSouth, Inc. (BXS) A Good Stock To Buy?

The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge funds have been producing disappointing net returns in recent years, however that was partly due to the poor performance of small-cap stocks in general. Well, small-cap stocks finally turned the corner and have been beating the large-cap stocks by more than 10 percentage points over the last 5 months.This means the relevancy of hedge funds’ public filings became inarguable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards BancorpSouth, Inc. (NYSE:BXS).

BancorpSouth, Inc. (NYSE:BXS) investors should be aware of a decrease in hedge fund interest recently. There were 13 hedge funds in our database with BXS positions at the end of September, down by 1 quarter-over-quarter. At the end of this article we will also compare BXS to other stocks including Cousins Properties Inc (NYSE:CUZ), Kate Spade & Co (NYSE:KATE), and Alamos Gold Inc (NYSE:AGI) to get a better sense of its popularity.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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How are hedge funds trading BancorpSouth, Inc. (NYSE:BXS)?

At the end of the third quarter, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a 7% dip from the previous quarter. By comparison, 10 hedge funds held shares or bullish call options in BXS heading into this year, so hedge fund ownership is still up by 30% in 2016 through September 30. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Ken Fisher’s Fisher Asset Management has the largest position in BancorpSouth, Inc. (NYSE:BXS), worth close to $68.5 million. Sitting at the No. 2 spot is Millennium Management, one of the 10 largest hedge funds in the world, with a $42.2 million position. Remaining peers that are bullish include Jim Simons’ Renaissance Technologies, Cliff Asness’ AQR Capital Management, and Ken Griffin’s Citadel Investment Group. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that said goodbye to their entire stakes in the stock during the third quarter. It’s worth mentioning that Matthew Tewksbury’s Stevens Capital Management said goodbye to the largest stake of the “upper crust” of funds studied by Insider Monkey, totaling about $1.1 million in stock, and Paul Tudor Jones’ Tudor Investment Corp was right behind this move, as the fund said goodbye to about $0.5 million worth of shares.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as BancorpSouth, Inc. (NYSE:BXS) but similarly valued. We will take a look at Cousins Properties Inc (NYSE:CUZ), Kate Spade & Co (NYSE:KATE), Alamos Gold Inc (NYSE:AGI), and Barnes Group Inc. (NYSE:B). This group of stocks’ market caps are similar to BXS’s market cap.

As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $180 million. That figure was also $180 million in BXS’s case. Kate Spade & Co (NYSE:KATE) is the most popular stock in this table. On the other hand Cousins Properties Inc (NYSE:CUZ) is the least popular one with only 9 bullish hedge fund positions. BancorpSouth, Inc. (NYSE:BXS) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard KATE might be a better candidate to consider taking a long position in.

Disclosure: None