Is S & T Bancorp Inc (NASDAQ:STBA) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before doing days of research on it. Given their 2 and 20 payment structure, hedge funds have more resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also have 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.
Despite S & T Bancorp Inc (NASDAQ:STBA)’s 5% gain since the beginning of the year, the money managers from our database are in a slightly pessimistic mood. The number of long hedge fund bets dropped by one in the third quarter and just five hedge funds reported holding shares of the company as of the end of September. At the end of this article we will also compare STBA to other stocks, including Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA), Cubic Corporation (NYSE:CUB), and Adeptus Health Inc (NYSE:ADPT) to get a better sense of its popularity.
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In the eyes of most shareholders, hedge funds are perceived as worthless, old financial vehicles of yesteryear. While there are more than 8000 funds trading today, We hone in on the leaders of this club, about 700 funds. These money managers control most of the smart money’s total asset base, and by keeping an eye on their best equity investments, Insider Monkey has spotted various investment strategies that have historically defeated the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points per year for a decade in their back tests.
Keeping this in mind, we’re going to view the recent action encompassing S & T Bancorp Inc (NASDAQ:STBA).
What does the smart money think about S & T Bancorp Inc (NASDAQ:STBA)?
Heading into Q4, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock. Among them, Renaissance Technologies holds the most valuable position in S & T Bancorp Inc (NASDAQ:STBA). Renaissance Technologies has a $3.5 million position in the stock, comprising less than 0.1% of its 13F portfolio. The second most bullish fund manager is Two Sigma Advisors, managed by John Overdeck and David Siegel, which holds a $1.3 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other peers with similar optimism comprise Cliff Asness’s AQR Capital Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Roger Ibbotson’s Zebra Capital Management.
In addition, it’s worth mentioning that Israel Englander’s Millennium Management dropped the biggest position of all the hedgies tracked by Insider Monkey, totaling about $2 million in stock, and Ken Gray and Steve Walsh’s Bryn Mawr Capital was right behind this move, as the fund cut about $1.1 million worth of shares.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as S & T Bancorp Inc (NASDAQ:STBA) but similarly valued. These stocks are Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA), Cubic Corporation (NYSE:CUB), Adeptus Health Inc (NYSE:ADPT), and Select Comfort Corp. (NASDAQ:SCSS). This group of stocks’ market valuations are closest to STBA’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MNTA | 17 | 277693 | -2 |
| CUB | 16 | 90819 | -6 |
| ADPT | 27 | 235415 | 7 |
| SCSS | 25 | 138945 | -4 |
As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $186 million, compared to just $7 million in STBA’s case. Adeptus Health Inc (NYSE:ADPT) is the most popular stock in this table. On the other hand Cubic Corporation (NYSE:CUB) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks, S & T Bancorp Inc (NASDAQ:STBA) is significantly less popular even than CUB. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
