How do we determine whether Simmons First National Corporation (NASDAQ:SFNC) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
Simmons First National Corporation (NASDAQ:SFNC) was in 5 hedge funds’ portfolios at the end of the third quarter of 2015. SFNC investors should be aware of a decrease in hedge fund sentiment in recent months. There were 8 hedge funds in our database with SFNC positions at the end of the previous quarter. 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 Select Medical Holdings Corporation (NYSE:SEM), Prothena Corporation PLC (NASDAQ:PRTA), and Third Point Reinsurance Ltd (NYSE:TPRE) to gather more data points.
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Now, let’s review the latest action encompassing Simmons First National Corporation (NASDAQ:SFNC).
How are hedge funds trading Simmons First National Corporation (NASDAQ:SFNC)?
At Q3’s end, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -38% from the previous quarter. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Jim Simons’ Renaissance Technologies has the number one position in Simmons First National Corporation (NASDAQ:SFNC), worth close to $5.5 million, comprising less than 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Ken Gray and Steve Walsh of Bryn Mawr Capital, with a $2.3 million position; 0.4% of its 13F portfolio is allocated to the stock. Other members of the smart money that are bullish include Sharif Siddiqui’s Alpenglow Capital, Matthew Tewksbury’s Stevens Capital Management and Ken Griffin’s Citadel Investment Group.
Seeing as Simmons First National Corporation (NASDAQ:SFNC) has faced a declination in interest from hedge fund managers, logic holds that there is a sect of money managers who were dropping their positions entirely by the end of the third quarter. At the top of the heap, Israel Englander’s Millennium Management dumped the biggest stake of the 700 funds monitored by Insider Monkey, totaling an estimated $1.6 million in stock, and Peter Muller’s PDT Partners was right behind this move, as the fund sold off about $0.7 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 3 funds by the end of the third quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Simmons First National Corporation (NASDAQ:SFNC) but similarly valued. We will take a look at Select Medical Holdings Corporation (NYSE:SEM), Prothena Corporation PLC (NASDAQ:PRTA), Third Point Reinsurance Ltd (NYSE:TPRE), and Avon Products, Inc. (NYSE:AVP). All of these stocks’ market caps match SFNC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SEM | 23 | 336828 | 1 |
| PRTA | 19 | 440415 | 3 |
| TPRE | 14 | 40180 | 1 |
| AVP | 30 | 246409 | 4 |
As you can see these stocks had an average of 21.5 hedge funds with bullish positions and the average amount invested in these stocks was $266 million. That figure was $11 million in SFNC’s case. Avon Products, Inc. (NYSE:AVP) is the most popular stock in this table. On the other hand Third Point Reinsurance Ltd (NYSE:TPRE) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks Simmons First National Corporation (NASDAQ:SFNC) is even less popular than TPRE. 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.
