Is Republic First Bancorp, Inc. (FRBK) A Good Stock To Buy?

In this article we will check out the progression of hedge fund sentiment towards Republic First Bancorp, Inc. (NASDAQ:FRBK) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.

Is FRBK a good stock to buy? Republic First Bancorp, Inc. (NASDAQ:FRBK) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 6 hedge funds’ portfolios at the end of March. Our calculations also showed that FRBK isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Tuscan Holdings Corp. II (NASDAQ:THCA), Jaguar Health, Inc. (NASDAQ:JAGX), and Paysign, Inc. (NASDAQ:PAYS) to gather more data points.

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 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Israel Englander of Millennium Management

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 $24 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. Now let’s check out the latest hedge fund action regarding Republic First Bancorp, Inc. (NASDAQ:FRBK).

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

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 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards FRBK over the last 23 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

The largest stake in Republic First Bancorp, Inc. (NASDAQ:FRBK) was held by Renaissance Technologies, which reported holding $4.2 million worth of stock at the end of December. It was followed by D E Shaw with a $0.8 million position. Other investors bullish on the company included Millennium Management, Two Sigma Advisors, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Engineers Gate Manager allocated the biggest weight to Republic First Bancorp, Inc. (NASDAQ:FRBK), around 0.01% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, dishing out 0.01 percent of its 13F equity portfolio to FRBK.

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Luxor Capital Group. 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 only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Engineers Gate Manager).

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Republic First Bancorp, Inc. (NASDAQ:FRBK) but similarly valued. These stocks are Tuscan Holdings Corp. II (NASDAQ:THCA), Jaguar Health, Inc. (NASDAQ:JAGX), Paysign, Inc. (NASDAQ:PAYS), Galera Therapeutics, Inc. (NASDAQ:GRTX), Airgain, Inc. (NASDAQ:AIRG), Civeo Corporation (NYSE:CVEO), and Norwood Financial Corp. (NASDAQ:NWFL). This group of stocks’ market caps resemble FRBK’s market cap.

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As you can see these stocks had an average of 8.4 hedge funds with bullish positions and the average amount invested in these stocks was $30 million. That figure was $6 million in FRBK’s case. Tuscan Holdings Corp. II (NASDAQ:THCA) is the most popular stock in this table. On the other hand Norwood Financial Corp. (NASDAQ:NWFL) is the least popular one with only 2 bullish hedge fund positions. Republic First Bancorp, Inc. (NASDAQ:FRBK) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for FRBK is 42.9. 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 19.3% in 2021 through June 25th and still beat the market by 4.8 percentage points. A small number of hedge funds were also right about betting on FRBK as the stock returned 16.4% since the end of the first quarter (through 6/25) and outperformed the market by an even larger margin.

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