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. We have processed the filings of the more than 817 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider PCB Bancorp (NASDAQ:PCB) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
PCB Bancorp (NASDAQ:PCB) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 4 hedge funds’ portfolios at the end of September. Our calculations also showed that PCB isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). At the end of this article we will also compare PCB to other stocks including ESSA Bancorp, Inc. (NASDAQ:ESSA), FVCBankcorp, Inc. (NASDAQ:FVCB), and Leaf Group Ltd (NYSE:LEAF) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Emanuel Friedman of EJF Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind let’s take a glance at the key hedge fund action encompassing PCB Bancorp (NASDAQ:PCB).
What have hedge funds been doing with PCB Bancorp (NASDAQ:PCB)?
At the end of the third quarter, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards PCB over the last 21 quarters. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, EJF Capital, managed by Emanuel J. Friedman, holds the most valuable position in PCB Bancorp (NASDAQ:PCB). EJF Capital has a $13.3 million position in the stock, comprising 1.1% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, managed by Jim Simons (founder), which holds a $0.9 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other hedge funds and institutional investors that are bullish encompass Roger Ibbotson’s Zebra Capital Management, John Overdeck and David Siegel’s Two Sigma Advisors and . In terms of the portfolio weights assigned to each position EJF Capital allocated the biggest weight to PCB Bancorp (NASDAQ:PCB), around 1.11% of its 13F portfolio. Zebra Capital Management is also relatively very bullish on the stock, dishing out 0.68 percent of its 13F equity portfolio to PCB.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as PCB Bancorp (NASDAQ:PCB) but similarly valued. We will take a look at ESSA Bancorp, Inc. (NASDAQ:ESSA), FVCBankcorp, Inc. (NASDAQ:FVCB), Leaf Group Ltd (NYSE:LEAF), Contura Energy, Inc. (NYSE:CTRA), DIRTT Environmental Solutions Ltd. (NASDAQ:DRTT), GSI Technology, Inc. (NASDAQ:GSIT), and Nano Dimension Ltd. (NASDAQ:NNDM). This group of stocks’ market valuations are similar to PCB’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ESSA | 3 | 8857 | 1 |
| FVCB | 3 | 3495 | -1 |
| LEAF | 10 | 26521 | -1 |
| CTRA | 18 | 46876 | -1 |
| DRTT | 8 | 24577 | -1 |
| GSIT | 4 | 12757 | -1 |
| NNDM | 2 | 172 | 1 |
| Average | 6.9 | 17608 | -0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.9 hedge funds with bullish positions and the average amount invested in these stocks was $18 million. That figure was $15 million in PCB’s case. Contura Energy, Inc. (NYSE:CTRA) is the most popular stock in this table. On the other hand Nano Dimension Ltd. (NASDAQ:NNDM) is the least popular one with only 2 bullish hedge fund positions. PCB Bancorp (NASDAQ:PCB) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PCB is 31.3. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on PCB as the stock returned 27.5% since the end of the third quarter (through 11/27) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
