Is BCML Stock A Buy Here?

Is BayCom Corp (NASDAQ:BCML) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.

Is BCML stock a buy? The smart money was taking a bullish view. The number of long hedge fund bets moved up by 1 lately. BayCom Corp (NASDAQ:BCML) was in 4 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 6. Our calculations also showed that BCML isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.

Matthew Lindenbaum of Basswood Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now let’s take a peek at the new hedge fund action regarding BayCom Corp (NASDAQ:BCML).

Do Hedge Funds Think BCML Is A Good Stock To Buy Now?

At first quarter’s end, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from the fourth quarter of 2020. By comparison, 6 hedge funds held shares or bullish call options in BCML a year ago. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, EJF Capital, managed by Emanuel J. Friedman, holds the number one position in BayCom Corp (NASDAQ:BCML). EJF Capital has a $11.7 million position in the stock, comprising 0.8% of its 13F portfolio. The second largest stake is held by Royce & Associates, led by Chuck Royce, holding a $4.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that are bullish encompass Matthew Lindenbaum’s Basswood Capital, Renaissance Technologies and . In terms of the portfolio weights assigned to each position EJF Capital allocated the biggest weight to BayCom Corp (NASDAQ:BCML), around 0.85% of its 13F portfolio. Basswood Capital is also relatively very bullish on the stock, dishing out 0.18 percent of its 13F equity portfolio to BCML.

With a general bullishness amongst the heavyweights, key hedge funds have jumped into BayCom Corp (NASDAQ:BCML) headfirst. Basswood Capital, managed by Matthew Lindenbaum, assembled the biggest position in BayCom Corp (NASDAQ:BCML). Basswood Capital had $4 million invested in the company at the end of the quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as BayCom Corp (NASDAQ:BCML) but similarly valued. We will take a look at Sequans Communications SA (NYSE:SQNS), SharpSpring, Inc. (NASDAQ:SHSP), Opthea Limited (NASDAQ:OPT), Mastech Digital, Inc. (NYSE:MHH), Points International Ltd (NASDAQ:PCOM), Aptinyx Inc. (NASDAQ:APTX), and Shore Bancshares, Inc. (NASDAQ:SHBI). This group of stocks’ market caps match BCML’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 6.7 hedge funds with bullish positions and the average amount invested in these stocks was $29 million. That figure was $21 million in BCML’s case. SharpSpring, Inc. (NASDAQ:SHSP) is the most popular stock in this table. On the other hand Opthea Limited (NASDAQ:OPT) is the least popular one with only 3 bullish hedge fund positions. BayCom Corp (NASDAQ:BCML) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BCML is 33.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and surpassed the market again by 3.3 percentage points. Unfortunately BCML wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); BCML investors were disappointed as the stock returned 3.5% since the end of March (through 6/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

Disclosure: None. This article was originally published at Insider Monkey.