At Insider Monkey, we pore over the filings of nearly 817 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 Summit Financial Group, Inc. (NASDAQ:SMMF) makes for a good investment right now.
Summit Financial Group, Inc. (NASDAQ:SMMF) investors should pay attention to a decrease in activity from the world’s largest hedge funds of late. Summit Financial Group, Inc. (NASDAQ:SMMF) was in 3 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 4. Our calculations also showed that SMMF isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most market participants, hedge funds are seen as unimportant, outdated financial tools of years past. While there are over 8000 funds in operation at the moment, Our experts look at the bigwigs of this club, around 850 funds. These money managers handle the majority of the hedge fund industry’s total asset base, and by following their finest investments, Insider Monkey has spotted several investment strategies that have historically defeated the broader indices. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website. Now let’s check out the new hedge fund action surrounding Summit Financial Group, Inc. (NASDAQ:SMMF).
How have hedgies been trading Summit Financial Group, Inc. (NASDAQ:SMMF)?
Heading into the fourth quarter of 2020, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -25% from the previous quarter. On the other hand, there were a total of 2 hedge funds with a bullish position in SMMF a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, holds the largest position in Summit Financial Group, Inc. (NASDAQ:SMMF). Renaissance Technologies has a $3.9 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is David Harding of Winton Capital Management, with a $0.3 million position; less than 0.1%% of its 13F portfolio is allocated to the company. In terms of the portfolio weights assigned to each position Fourthstone LLC allocated the biggest weight to Summit Financial Group, Inc. (NASDAQ:SMMF), around 0.19% of its 13F portfolio. Winton Capital Management is also relatively very bullish on the stock, designating 0.01 percent of its 13F equity portfolio to SMMF.
Seeing as Summit Financial Group, Inc. (NASDAQ:SMMF) has faced declining sentiment from hedge fund managers, it’s easy to see that there were a few hedgies that decided to sell off their full holdings heading into Q4. It’s worth mentioning that Israel Englander’s Millennium Management sold off the biggest investment of the “upper crust” of funds watched by Insider Monkey, totaling an estimated $0.5 million in stock. Chuck Royce’s fund, Royce & Associates, also cut its stock, about $0 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 1 funds heading into Q4.
Let’s now review hedge fund activity in other stocks similar to Summit Financial Group, Inc. (NASDAQ:SMMF). We will take a look at Evofem Biosciences, Inc. (NASDAQ:EVFM), Callon Petroleum Company (NYSE:CPE), RGC Resources, Inc. (NASDAQ:RGCO), MVB Financial Corp. (NASDAQ:MVBF), General Finance Corporation (NASDAQ:GFN), Atlanticus Holdings Corp (NASDAQ:ATLC), and Great Ajax Corp (NYSE:AJX). This group of stocks’ market values resemble SMMF’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EVFM | 11 | 4626 | -4 |
| CPE | 4 | 9386 | -16 |
| RGCO | 1 | 1916 | -1 |
| MVBF | 3 | 22290 | -2 |
| GFN | 3 | 7753 | -1 |
| ATLC | 2 | 5259 | 0 |
| AJX | 5 | 13167 | -1 |
| Average | 4.1 | 9200 | -3.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 4.1 hedge funds with bullish positions and the average amount invested in these stocks was $9 million. That figure was $5 million in SMMF’s case. Evofem Biosciences, Inc. (NASDAQ:EVFM) is the most popular stock in this table. On the other hand RGC Resources, Inc. (NASDAQ:RGCO) is the least popular one with only 1 bullish hedge fund positions. Summit Financial Group, Inc. (NASDAQ:SMMF) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SMMF is 36.5. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 28.1% in 2020 through November 23rd and still beat the market by 15.4 percentage points. A small number of hedge funds were also right about betting on SMMF as the stock returned 39.4% since the end of the third quarter (through 11/23) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
