Is LMST Stock A Buy?

In this article we will take a look at whether hedge funds think Limestone Bancorp, Inc. (NASDAQ:LMST) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.

Is LMST stock a buy? Limestone Bancorp, Inc. (NASDAQ:LMST) has experienced an increase in enthusiasm from smart money in recent months. Limestone Bancorp, Inc. (NASDAQ:LMST) was in 4 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 4. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that LMST isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

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Fred Cummings of Elizabeth Park Capital

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Do Hedge Funds Think LMST 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 100% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards LMST over the last 23 quarters. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Emanuel J. Friedman’s EJF Capital has the most valuable position in Limestone Bancorp, Inc. (NASDAQ:LMST), worth close to $4.8 million, comprising 0.3% of its total 13F portfolio. On EJF Capital’s heels is Elizabeth Park Capital Management, managed by Fred Cummings, which holds a $1.5 million position; 0.5% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors with similar optimism include Anton Schutz’s Mendon Capital Advisors, Renaissance Technologies and . In terms of the portfolio weights assigned to each position Elizabeth Park Capital Management allocated the biggest weight to Limestone Bancorp, Inc. (NASDAQ:LMST), around 0.5% of its 13F portfolio. EJF Capital is also relatively very bullish on the stock, designating 0.34 percent of its 13F equity portfolio to LMST.

As one would reasonably expect, key money managers have jumped into Limestone Bancorp, Inc. (NASDAQ:LMST) headfirst. Elizabeth Park Capital Management, managed by Fred Cummings, initiated the biggest position in Limestone Bancorp, Inc. (NASDAQ:LMST). Elizabeth Park Capital Management had $1.5 million invested in the company at the end of the quarter. Renaissance Technologies also initiated a $0.3 million position during the quarter.

Let’s also examine hedge fund activity in other stocks similar to Limestone Bancorp, Inc. (NASDAQ:LMST). These stocks are CB Financial Services, Inc. (NASDAQ:CBFV), CareCloud, Inc. (NASDAQ:MTBC), Fang Holdings Limited (NYSE:SFUN), Biofrontera AG (NASDAQ:BFRA), Tanzanian Gold Corporation (NYSE:TRX), Armata Pharmaceuticals, Inc. (NYSE:ARMP), and JMP Group LLC (NYSE:JMP). This group of stocks’ market values match LMST’s market value.

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As you can see these stocks had an average of 2.4 hedge funds with bullish positions and the average amount invested in these stocks was $2 million. That figure was $7 million in LMST’s case. CareCloud, Inc. (NASDAQ:MTBC) is the most popular stock in this table. On the other hand JMP Group LLC (NYSE:JMP) is the least popular one with only 1 bullish hedge fund positions. Limestone Bancorp, Inc. (NASDAQ:LMST) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for LMST is 87. 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 positive signal but 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 beat the market again by 3.3 percentage points. Unfortunately LMST wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on LMST were disappointed as the stock returned 3.1% 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 many of these stocks already outperformed the market since 2019.

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