In this article you are going to find out whether hedge funds think Provident Bancorp, Inc. (NASDAQ:PVBC) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Is PVBC a good stock to buy? Money managers were in a pessimistic mood. The number of bullish hedge fund positions shrunk by 2 recently. Provident Bancorp, Inc. (NASDAQ:PVBC) was in 5 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 8. Our calculations also showed that PVBC 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.
Chuck Royce of Royce & Associates
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 go over the new hedge fund action regarding Provident Bancorp, Inc. (NASDAQ:PVBC).
Do Hedge Funds Think PVBC Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -29% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards PVBC over the last 23 quarters. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies has the number one position in Provident Bancorp, Inc. (NASDAQ:PVBC), worth close to $1.6 million, comprising less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Royce & Associates, led by Chuck Royce, holding a $1.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that are bullish consist of Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Michael Price’s MFP Investors and John Overdeck and David Siegel’s Two Sigma Advisors. In terms of the portfolio weights assigned to each position MFP Investors allocated the biggest weight to Provident Bancorp, Inc. (NASDAQ:PVBC), around 0.1% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, setting aside 0.01 percent of its 13F equity portfolio to PVBC.
Seeing as Provident Bancorp, Inc. (NASDAQ:PVBC) has witnessed falling interest from hedge fund managers, we can see that there is a sect of hedgies who were dropping their entire stakes by the end of the first quarter. Intriguingly, Lawrence Seidman’s Seidman Investment Partnership sold off the largest investment of the 750 funds followed by Insider Monkey, valued at about $2 million in stock, and Israel Englander’s Millennium Management was right behind this move, as the fund said goodbye to about $0.2 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 2 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 Provident Bancorp, Inc. (NASDAQ:PVBC) but similarly valued. We will take a look at SuRo Capital Corp. (NASDAQ:SSSS), Hywin Holdings Ltd. (NASDAQ:HYW), Great Panther Mining Ltd (NYSE:GPL), Navios Maritime Partners L.P. (NYSE:NMM), Premier Financial Bancorp, Inc. (NASDAQ:PFBI), Co-Diagnostics, Inc. (NASDAQ:CODX), and Blue Ridge Bankshares, Inc. (NYSE:BRBS). This group of stocks’ market valuations match PVBC’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SSSS | 12 | 31501 | 1 |
| HYW | 1 | 1960 | 1 |
| GPL | 7 | 7037 | -1 |
| NMM | 4 | 6019 | 1 |
| PFBI | 6 | 5673 | 3 |
| CODX | 4 | 2898 | -1 |
| BRBS | 4 | 31909 | 1 |
| Average | 5.4 | 12428 | 0.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.4 hedge funds with bullish positions and the average amount invested in these stocks was $12 million. That figure was $5 million in PVBC’s case. SuRo Capital Corp. (NASDAQ:SSSS) is the most popular stock in this table. On the other hand Hywin Holdings Ltd. (NASDAQ:HYW) is the least popular one with only 1 bullish hedge fund positions. Provident Bancorp, Inc. (NASDAQ:PVBC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PVBC is 39.9. 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 still beat the market by 6.1 percentage points. A small number of hedge funds were also right about betting on PVBC as the stock returned 13.8% since the end of the first quarter (through 6/18) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
