Is Nicolet Bankshares Inc. (NCBS) A Good Stock To Buy?

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31st. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Nicolet Bankshares Inc. (NASDAQ:NCBS).

Is NCBS a good stock to buy? Money managers were turning less bullish. The number of long hedge fund bets were cut by 1 lately. Nicolet Bankshares Inc. (NASDAQ:NCBS) was in 3 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 NCBS isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

In the eyes of most traders, hedge funds are perceived as slow, outdated investment vehicles of years past. While there are over 8000 funds in operation at the moment, Our researchers look at the upper echelon of this group, approximately 850 funds. It is estimated that this group of investors preside over most of the hedge fund industry’s total capital, and by keeping an eye on their inimitable stock picks, Insider Monkey has spotted several investment strategies that have historically outperformed the broader indices. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Cliff Asness of AQR Capital Management

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. Keeping this in mind let’s check out the recent hedge fund action encompassing Nicolet Bankshares Inc. (NASDAQ:NCBS).

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

At the end of the first quarter, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -25% from the fourth quarter of 2020. By comparison, 5 hedge funds held shares or bullish call options in NCBS a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Citadel Investment Group was the largest shareholder of Nicolet Bankshares Inc. (NASDAQ:NCBS), with a stake worth $1.1 million reported as of the end of March. Trailing Citadel Investment Group was D E Shaw, which amassed a stake valued at $0.6 million. AQR Capital Management was also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position D E Shaw allocated the biggest weight to Nicolet Bankshares Inc. (NASDAQ:NCBS), around 0.0006% of its 13F portfolio. AQR Capital Management is also relatively very bullish on the stock, designating 0.0004 percent of its 13F equity portfolio to NCBS.

Because Nicolet Bankshares Inc. (NASDAQ:NCBS) has experienced a decline in interest from the smart money, we can see that there exists a select few hedgies that decided to sell off their entire stakes by the end of the first quarter. Interestingly, David Harding’s Winton Capital Management sold off the biggest investment of all the hedgies watched by Insider Monkey, worth an estimated $0.7 million in stock. Israel Englander’s fund, Millennium Management, also cut its stock, about $0.3 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 1 funds by the end of the first quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Nicolet Bankshares Inc. (NASDAQ:NCBS) but similarly valued. These stocks are The Lovesac Company (NASDAQ:LOVE), Affimed NV (NASDAQ:AFMD), Brigham Minerals, Inc. (NYSE:MNRL), Anterix Inc. (NASDAQ:ATEX), Chimerix Inc (NASDAQ:CMRX), Caleres Inc (NYSE:CAL), and Trean Insurance Group, Inc. (NASDAQ:TIG). This group of stocks’ market values are similar to NCBS’s market value.

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As you can see these stocks had an average of 16.4 hedge funds with bullish positions and the average amount invested in these stocks was $155 million. That figure was $2 million in NCBS’s case. Affimed NV (NASDAQ:AFMD) is the most popular stock in this table. On the other hand Trean Insurance Group, Inc. (NASDAQ:TIG) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Nicolet Bankshares Inc. (NASDAQ:NCBS) is even less popular than TIG. Our overall hedge fund sentiment score for NCBS is 19. 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. Hedge funds dodged a bullet by taking a bearish stance towards NCBS. Our calculations showed that the top 10 most popular hedge fund stocks 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 but managed to beat the market again by 3.3 percentage points. Unfortunately NCBS wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was very bearish); NCBS investors were disappointed as the stock returned -9.8% since the end of the first quarter (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 since 2019.

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

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