Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
Hometrust Bancshares Inc (NASDAQ:HTBI) has experienced a decrease in activity from the world’s largest hedge funds lately. There were 11 hedge funds in our database with HTBI holdings at the end of the previous quarter. At the end of this article we will also compare HTBI to other stocks including Baozun Inc (ADR) (NASDAQ:BZUN), Energous Corp (NASDAQ:WATT), and KMG Chemicals, Inc. (NYSE:KMG) 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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With all of this in mind, let’s take a gander at the latest action regarding Hometrust Bancshares Inc (NASDAQ:HTBI).
What have hedge funds been doing with Hometrust Bancshares Inc (NASDAQ:HTBI)?
Heading into the fourth quarter of 2016, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a change of -18% from the second quarter of 2016. On the other hand, there were a total of 9 hedge funds with a bullish position in HTBI at the beginning of this year. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, one of the largest hedge funds in the world, holds the biggest position in Hometrust Bancshares Inc (NASDAQ:HTBI). Renaissance Technologies has a $9.3 million position in the stock. Sitting at the No. 2 spot is Peter Schliemann of Rutabaga Capital Management which holds a $5.9 million position; 1.2% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors with similar optimism comprise John D. Gillespie’s Prospector Partners, Neil Chriss’ Hutchin Hill Capital and Michael Price’s MFP Investors. We should note that MFP Investors is 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 Israel Englander’s Millennium Management said goodbye to the biggest position of the “upper crust” of funds studied by Insider Monkey, valued at about $0.5 million in stock, and Cliff Asness’s AQR Capital Management was right behind this move, as the fund dropped about $0.4 million worth of shares.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Hometrust Bancshares Inc (NASDAQ:HTBI) but similarly valued. We will take a look at Baozun Inc (ADR) (NASDAQ:BZUN), Energous Corp (NASDAQ:WATT), KMG Chemicals, Inc. (NYSE:KMG), and ChannelAdvisor Corp (NYSE:ECOM). This group of stocks’ market caps resemble HTBI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BZUN | 9 | 22381 | 3 |
| WATT | 5 | 36916 | 3 |
| KMG | 10 | 66067 | 1 |
| ECOM | 10 | 14011 | 1 |
As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $35 million. That figure was $25 million in HTBI’s case. KMG Chemicals, Inc. (NYSE:KMG) is the most popular stock in this table. On the other hand Energous Corp (NASDAQ:WATT) is the least popular one with only 5 bullish hedge fund positions. Hometrust Bancshares Inc (NASDAQ:HTBI) 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. In this regard KMG might be a better candidate to consider taking a long position in.
Disclosure: None
