We are still in an overall bull market and many stocks that smart money investors were piling into surged through the end of November. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 54% and 51% respectively. Hedge funds’ top 3 stock picks returned 41.7% this year and beat the S&P 500 ETFs by 14 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like The Bank of N.T. Butterfield & Son Limited (NYSE:NTB).
Is The Bank of N.T. Butterfield & Son Limited (NYSE:NTB) worth your attention right now? Hedge funds are turning bullish. The number of bullish hedge fund bets advanced by 2 recently. Our calculations also showed that NTB isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are a large number of formulas stock market investors put to use to appraise their stock investments. A duo of the most innovative formulas are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the top picks of the top money managers can beat the broader indices by a significant amount (see the details here).
Paul Marshall of Marshall Wace
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. Let’s analyze the recent hedge fund action encompassing The Bank of N.T. Butterfield & Son Limited (NYSE:NTB).
What have hedge funds been doing with The Bank of N.T. Butterfield & Son Limited (NYSE:NTB)?
At the end of the third quarter, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 15% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards NTB over the last 17 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Southpoint Capital Advisors, managed by John Smith Clark, holds the largest position in The Bank of N.T. Butterfield & Son Limited (NYSE:NTB). Southpoint Capital Advisors has a $59.3 million position in the stock, comprising 2.2% of its 13F portfolio. The second most bullish fund manager is Royce & Associates, led by Chuck Royce, holding a $10 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other members of the smart money with similar optimism contain John Overdeck and David Siegel’s Two Sigma Advisors, David E. Shaw’s D E Shaw and Paul Marshall and Ian Wace’s Marshall Wace. In terms of the portfolio weights assigned to each position Southpoint Capital Advisors allocated the biggest weight to The Bank of N.T. Butterfield & Son Limited (NYSE:NTB), around 2.24% of its 13F portfolio. Prospector Partners is also relatively very bullish on the stock, designating 0.54 percent of its 13F equity portfolio to NTB.
As aggregate interest increased, key hedge funds were breaking ground themselves. Renaissance Technologies, established the largest position in The Bank of N.T. Butterfield & Son Limited (NYSE:NTB). Renaissance Technologies had $2.8 million invested in the company at the end of the quarter. Joshua Nash’s Ulysses Management also initiated a $2.2 million position during the quarter. The only other fund with a new position in the stock is Minhua Zhang’s Weld Capital Management.
Let’s also examine hedge fund activity in other stocks similar to The Bank of N.T. Butterfield & Son Limited (NYSE:NTB). We will take a look at Moelis & Company (NYSE:MC), Matson, Inc. (NYSE:MATX), Revolve Group, Inc. (NYSE:RVLV), and Dycom Industries, Inc. (NYSE:DY). All of these stocks’ market caps resemble NTB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MC | 16 | 63550 | 3 |
| MATX | 10 | 5024 | 2 |
| RVLV | 14 | 49758 | -1 |
| DY | 17 | 56809 | 0 |
| Average | 14.25 | 43785 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.25 hedge funds with bullish positions and the average amount invested in these stocks was $44 million. That figure was $115 million in NTB’s case. Dycom Industries, Inc. (NYSE:DY) is the most popular stock in this table. On the other hand Matson, Inc. (NYSE:MATX) is the least popular one with only 10 bullish hedge fund positions. The Bank of N.T. Butterfield & Son Limited (NYSE:NTB) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on NTB as the stock returned 18.1% during the fourth quarter (through the end of November) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
