At Insider Monkey, we pore over the filings of more than 700 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not ServisFirst Bancshares, Inc. (NASDAQ:SFBS) makes for a good investment right now.
ServisFirst Bancshares is a regional bank holding company and it was in 10 hedge funds’ portfolios at the end of the third quarter of 2015, compared to 11 funds a quarter earlier. 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 Hersha Hospitality Trust (NYSE:HT), Union First Market Bankshares Corp. (NASDAQ:UBSH), and Lendingtree Inc (NASDAQ:TREE) to gather more data points.
Follow Servisfirst Bancshares Inc. (NASDAQ:SFBS)
Follow Servisfirst Bancshares Inc. (NASDAQ:SFBS)
In today’s marketplace there are numerous gauges stock traders put to use to evaluate stocks. A duo of the best gauges are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the top picks of the elite fund managers can trounce their index-focused peers by a healthy amount (see the details here).
Now, let’s review the new action regarding ServisFirst Bancshares, Inc. (NASDAQ:SFBS).
How have hedgies been trading ServisFirst Bancshares, Inc. (NASDAQ:SFBS)?
Heading into Q4, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a decline of 9% from a quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Tom Brown’s Second Curve Capital has the largest position in ServisFirst Bancshares, Inc. (NASDAQ:SFBS), worth close to $14.7 million, corresponding to 6.6% of its total 13F portfolio. The second most bullish fund manager is Royce & Associates, led by Chuck Royce, holding a $8.9 million position; less than 0.1%% of its 13F portfolio is allocated to the company. The remaining members of the smart money with similar optimism encompass Ken Fisher’s Fisher Asset Management, Matthew Lindenbaum’s Basswood Capital, and Jim Simons’ Renaissance Technologies.
Since ServisFirst Bancshares, Inc. (NASDAQ:SFBS) has witnessed a declining sentiment from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of funds that elected to cut their positions entirely last quarter. Intriguingly, William Black’s Consector Capital sold off the largest stake of all the hedgies tracked by Insider Monkey, valued at an estimated $1.1 million in stock, and Israel Englander’s Millennium Management was right behind this move, as the fund cut about $0.6 million worth of shares.
Let’s go over hedge fund activity in other stocks similar to ServisFirst Bancshares, Inc. (NASDAQ:SFBS). We will take a look at Hersha Hospitality Trust (NYSE:HT), Union First Market Bankshares Corp. (NASDAQ:UBSH), Lendingtree Inc (NASDAQ:TREE), and Kearny Financial Corp. (NASDAQ:KRNY). This group of stocks’ market values are similar to SFBS’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HT | 9 | 63047 | -2 |
| UBSH | 8 | 21689 | 1 |
| TREE | 24 | 124278 | 6 |
| KRNY | 22 | 164038 | 1 |
As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $93 million, compared to $34 million in SFBS’s case. Lendingtree Inc (NASDAQ:TREE) is the most popular stock in this table, while Union First Market Bankshares Corp. (NASDAQ:UBSH) is the least popular one with only 8 bullish hedge fund positions. ServisFirst Bancshares, Inc. (NASDAQ:SFBS) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard TREE might be a better candidate to consider a long position.
