Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that’s why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to smartest analysts and expensive data/information sources that individual investors can’t match. So should one consider investing in South State Corporation (NASDAQ:SSB)? The smart money sentiment can provide an answer to this question.
Is South State Corporation (NASDAQ:SSB) undervalued? Money managers are becoming hopeful. The number of bullish hedge fund positions inched up by 3 lately. SSB was in 12 hedge funds’ portfolios at the end of the third quarter of 2015. There were 9 hedge funds in our database with SSB positions at the end of the previous quarter. At the end of this article we will also compare SSB to other stocks including Science Applications International Corp (NYSE:SAIC), Entegris Inc (NASDAQ:ENTG), and Black Hills Corp (NYSE:BKH) to get a better sense of its popularity.
Follow Southstate Corp (NASDAQ:SSB)
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Now, let’s go over the recent action encompassing South State Corporation (NASDAQ:SSB).
How have hedgies been trading South State Corporation (NASDAQ:SSB)?
At the end of the third quarter, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from the second quarter. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Forest Hill Capital, managed by Mark Lee, holds the number one position in South State Corporation (NASDAQ:SSB). Forest Hill Capital has a $44.5 million position in the stock, comprising 4.2% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, managed by Jim Simons, which holds a $10.4 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Remaining peers that hold long positions contain Chuck Royce’s Royce & Associates, Anton Schutz’s Mendon Capital Advisors and Gregg J. Powers’s Private Capital Management.
As one would reasonably expect, some big names have jumped into South State Corporation (NASDAQ:SSB) headfirst. AQR Capital Management, managed by Cliff Asness, assembled the most valuable position in South State Corporation (NASDAQ:SSB). AQR Capital Management had $0.9 million invested in the company at the end of the quarter. D E Shaw also made a $0.8 million investment in the stock during the quarter. The other funds with brand new SSB positions are Matthew Tewksbury’s Stevens Capital Management and Ken Griffin’s Citadel Investment Group.
Let’s now take a look at hedge fund activity in other stocks similar to South State Corporation (NASDAQ:SSB). We will take a look at Science Applications International Corp (NYSE:SAIC), Entegris Inc (NASDAQ:ENTG), Black Hills Corp (NYSE:BKH), and Alliance Holdings GP, L.P. (NASDAQ:AHGP). This group of stocks’ market caps resemble SSB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SAIC | 20 | 125846 | 2 |
| ENTG | 19 | 396921 | 5 |
| BKH | 18 | 129397 | 3 |
| AHGP | 7 | 20968 | 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 $168 million. That figure was $78 million in SSB’s case. Science Applications International Corp (NYSE:SAIC) is the most popular stock in this table. On the other hand Alliance Holdings GP, L.P. (NASDAQ:AHGP) is the least popular one with only 7 bullish hedge fund positions. South State Corporation (NASDAQ:SSB) 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 SAIC might be a better candidate to consider a long position.
