The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Northeast Bank (NASDAQ:NBN).
Northeast Bank (NASDAQ:NBN) investors should pay attention to an increase in hedge fund sentiment of late. NBN was in 6 hedge funds’ portfolios at the end of March. There were 5 hedge funds in our database with NBN holdings at the end of the previous quarter. Our calculations also showed that NBN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Michael Price of MFP Investors
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to go over the new hedge fund action encompassing Northeast Bank (NASDAQ:NBN).
What does smart money think about Northeast Bank (NASDAQ:NBN)?
At the end of the first quarter, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from the previous quarter. By comparison, 5 hedge funds held shares or bullish call options in NBN a year ago. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
The largest stake in Northeast Bank (NASDAQ:NBN) was held by Castine Capital Management, which reported holding $7.6 million worth of stock at the end of September. It was followed by Basswood Capital with a $4.1 million position. Other investors bullish on the company included Renaissance Technologies, MFP Investors, and Seidman Investment Partnership. In terms of the portfolio weights assigned to each position Castine Capital Management allocated the biggest weight to Northeast Bank (NASDAQ:NBN), around 4.16% of its 13F portfolio. Seidman Investment Partnership is also relatively very bullish on the stock, earmarking 0.72 percent of its 13F equity portfolio to NBN.
With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. Seidman Investment Partnership, managed by Lawrence Seidman, established the largest position in Northeast Bank (NASDAQ:NBN). Seidman Investment Partnership had $0.6 million invested in the company at the end of the quarter. Adam Peterson’s Magnolia Capital Fund also made a $0.3 million investment in the stock during the quarter.
Let’s now review hedge fund activity in other stocks similar to Northeast Bank (NASDAQ:NBN). These stocks are Soleno Therapeutics, Inc. (NASDAQ:SLNO), B Communications Ltd (NASDAQ:BCOM), Venus Concept Inc. (NASDAQ:VERO), and ExOne Co (NASDAQ:XONE). This group of stocks’ market values resemble NBN’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SLNO | 9 | 19054 | 4 |
| BCOM | 1 | 62 | 0 |
| VERO | 2 | 854 | -1 |
| XONE | 3 | 573 | 1 |
| Average | 3.75 | 5136 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.75 hedge funds with bullish positions and the average amount invested in these stocks was $5 million. That figure was $19 million in NBN’s case. Soleno Therapeutics, Inc. (NASDAQ:SLNO) is the most popular stock in this table. On the other hand B Communications Ltd (NASDAQ:BCOM) is the least popular one with only 1 bullish hedge fund positions. Northeast Bank (NASDAQ:NBN) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th but still beat the market by 14.2 percentage points. Hedge funds were also right about betting on NBN as the stock returned 50.6% in Q2 (through June 10th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
