At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Tiger Global because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.
First Financial Corp (NASDAQ:THFF) has experienced a decrease in support from the world’s most elite money managers lately. THFF was in 5 hedge funds’ portfolios at the end of December. There were 7 hedge funds in our database with THFF positions at the end of the previous quarter. Our calculations also showed that thff isn’t among the 30 most popular stocks among hedge funds.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. 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.
Noam Gottesman, GLG Partners
We’re going to take a peek at the recent hedge fund action surrounding First Financial Corp (NASDAQ:THFF).
Hedge fund activity in First Financial Corp (NASDAQ:THFF)
At the end of the fourth quarter, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of -29% from the second quarter of 2018. Below, you can check out the change in hedge fund sentiment towards THFF over the last 14 quarters. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
The largest stake in First Financial Corp (NASDAQ:THFF) was held by Renaissance Technologies, which reported holding $7.5 million worth of stock at the end of December. It was followed by Castine Capital Management with a $5 million position. Other investors bullish on the company included GLG Partners, Bailard Inc, and Two Sigma Advisors.
Because First Financial Corp (NASDAQ:THFF) has experienced a decline in interest from hedge fund managers, logic holds that there lies a certain “tier” of hedgies that elected to cut their positions entirely last quarter. It’s worth mentioning that Cliff Asness’s AQR Capital Management dropped the biggest stake of the “upper crust” of funds tracked by Insider Monkey, totaling close to $2.2 million in stock. Chuck Royce’s fund, Royce & Associates, also said goodbye to its stock, about $0 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 2 funds last quarter.
Let’s also examine hedge fund activity in other stocks similar to First Financial Corp (NASDAQ:THFF). We will take a look at SunCoke Energy Partners LP (NYSE:SXCP), America’s Car-Mart, Inc. (NASDAQ:CRMT), Heritage Commerce Corp. (NASDAQ:HTBK), and International Seaways, Inc. (NYSE:INSW). All of these stocks’ market caps are closest to THFF’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SXCP | 5 | 1900 | -1 |
| CRMT | 18 | 70778 | 2 |
| HTBK | 9 | 21854 | -1 |
| INSW | 8 | 188804 | 0 |
| Average | 10 | 70834 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $71 million. That figure was $17 million in THFF’s case. America’s Car-Mart, Inc. (NASDAQ:CRMT) is the most popular stock in this table. On the other hand SunCoke Energy Partners LP (NYSE:SXCP) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks First Financial Corp (NASDAQ:THFF) is even less popular than SXCP. Hedge funds dodged a bullet by taking a bearish stance towards THFF. 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 THFF wasn’t nearly as popular as these 15 stock (hedge fund sentiment was very bearish); THFF investors were disappointed as the stock returned 3.7% 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.
