Is FBP Stock A Buy or Sell?

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of First Bancorp (NYSE:FBP).

Is FBP stock a buy? First Bancorp (NYSE:FBP) was in 23 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 32. FBP shareholders have witnessed an increase in hedge fund sentiment in recent months. There were 21 hedge funds in our database with FBP holdings at the end of September. Our calculations also showed that FBP isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 124 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Emanuel Friedman of EJF Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, auto parts business is a recession resistant business, so we are taking a closer look at this discount auto parts stock that is growing at a 196% annualized rate. We go through lists like the 15 best micro-cap stocks to buy now to identify the next stock with 10x upside potential. 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 website. Now let’s take a glance at the key hedge fund action surrounding First Bancorp (NYSE:FBP).

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

Heading into the first quarter of 2021, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of 10% from the third quarter of 2020. On the other hand, there were a total of 32 hedge funds with a bullish position in FBP a year ago. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).

The largest stake in First Bancorp (NYSE:FBP) was held by Arctis Global, which reported holding $62.3 million worth of stock at the end of December. It was followed by EJF Capital with a $38.4 million position. Other investors bullish on the company included Alyeska Investment Group, Point72 Asset Management, and Arrowstreet Capital. In terms of the portfolio weights assigned to each position Arctis Global allocated the biggest weight to First Bancorp (NYSE:FBP), around 13.44% of its 13F portfolio. Mendon Capital Advisors is also relatively very bullish on the stock, designating 4.65 percent of its 13F equity portfolio to FBP.

As industrywide interest jumped, key hedge funds were breaking ground themselves. Arctis Global, managed by Viraj Mehta, initiated the biggest position in First Bancorp (NYSE:FBP). Arctis Global had $62.3 million invested in the company at the end of the quarter. Emanuel J. Friedman’s EJF Capital also initiated a $38.4 million position during the quarter. The following funds were also among the new FBP investors: Frank Fu’s CaaS Capital, David Rosen’s Rubric Capital Management, and Karim Abbadi and Edward McBride’s Centiva Capital.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as First Bancorp (NYSE:FBP) but similarly valued. These stocks are Winnebago Industries, Inc. (NYSE:WGO), Southwestern Energy Company (NYSE:SWN), Federal Signal Corporation (NYSE:FSS), Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB), Mueller Industries, Inc. (NYSE:MLI), Nkarta, Inc. (NASDAQ:NKTX), and Aphria Inc. (NASDAQ:APHA). This group of stocks’ market caps resemble FBP’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 16.7 hedge funds with bullish positions and the average amount invested in these stocks was $244 million. That figure was $259 million in FBP’s case. Winnebago Industries, Inc. (NYSE:WGO) is the most popular stock in this table. On the other hand Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) is the least popular one with only 10 bullish hedge fund positions. First Bancorp (NYSE:FBP) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FBP is 66.8. 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. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and still beat the market by 0.9 percentage points. Hedge funds were also right about betting on FBP as the stock returned 30.3% since the end of Q4 (through 4/19) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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