Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Northeast Bank (NASDAQ:NBN), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Northeast Bank (NASDAQ:NBN) investors should pay attention to a decrease in hedge fund interest of late. Northeast Bank (NASDAQ:NBN) was in 5 hedge funds’ portfolios at the end of March. The all time high for this statistic is 7. There were 6 hedge funds in our database with NBN positions at the end of the fourth quarter. Our calculations also showed that NBN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Matthew Lindenbaum of Basswood Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $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. With all of this in mind we’re going to review the fresh hedge fund action encompassing Northeast Bank (NASDAQ:NBN).
Do Hedge Funds Think NBN Is A Good Stock To Buy Now?
At the end of March, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -17% from the fourth quarter of 2020. By comparison, 6 hedge funds held shares or bullish call options in NBN a year ago. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Basswood Capital, managed by Matthew Lindenbaum, holds the largest position in Northeast Bank (NASDAQ:NBN). Basswood Capital has a $16.7 million position in the stock, comprising 0.8% of its 13F portfolio. On Basswood Capital’s heels is MFP Investors, managed by Michael Price, which holds a $6.1 million position; 0.7% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that are bullish comprise Renaissance Technologies, Israel Englander’s Millennium Management and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Basswood Capital allocated the biggest weight to Northeast Bank (NASDAQ:NBN), around 0.76% of its 13F portfolio. MFP Investors is also relatively very bullish on the stock, earmarking 0.73 percent of its 13F equity portfolio to NBN.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Seidman Investment Partnership. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because none of the 750+ hedge funds tracked by Insider Monkey identified NBN as a viable investment and initiated a position in the stock.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Northeast Bank (NASDAQ:NBN) but similarly valued. These stocks are NewHold Investment Corp. (NASDAQ:NHIC), Bankwell Financial Group, Inc. (NASDAQ:BWFG), Bank of Commerce Holdings (NASDAQ:BOCH), Investar Holding Corporation (NASDAQ:ISTR), TELA Bio, Inc. (NASDAQ:TELA), Kaixin Auto Holdings (NASDAQ:KXIN), and First Business Financial Services Inc (NASDAQ:FBIZ). This group of stocks’ market valuations are similar to NBN’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NHIC | 16 | 62215 | 0 |
| BWFG | 4 | 26574 | -1 |
| BOCH | 3 | 6001 | -1 |
| ISTR | 5 | 20928 | 0 |
| TELA | 9 | 70631 | 1 |
| KXIN | 5 | 490 | 0 |
| FBIZ | 3 | 6057 | 1 |
| Average | 6.4 | 27557 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.4 hedge funds with bullish positions and the average amount invested in these stocks was $28 million. That figure was $30 million in NBN’s case. NewHold Investment Corp. (NASDAQ:NHIC) is the most popular stock in this table. On the other hand Bank of Commerce Holdings (NASDAQ:BOCH) is the least popular one with only 3 bullish hedge fund positions. Northeast Bank (NASDAQ:NBN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for NBN is 33.1. 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. 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 17.4% in 2021 through June 18th and beat the market by 6.1 percentage points. A small number of hedge funds were also right about betting on NBN, though not to the same extent, as the stock returned 9.1% since the end of Q1 (through June 18th) and outperformed the market.
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Disclosure: None. This article was originally published at Insider Monkey.
