Looking for stocks with high upside potential? Just follow the big players within the hedge fund industry. Why should you do so? Let’s take a brief look at what statistics have to say about hedge funds’ stock picking abilities to illustrate. The Standard and Poor’s 500 Index returned approximately 5.7% in the 12 months ending October 26 (including dividend payments). Conversely, hedge funds’ 30 preferred S&P 500 stocks (as of June 2014) generated a return of 15.1% during the same 12-month period, with 53% of these stock picks outperforming the broader market benchmark. Coincidence? It might happen to be so, but it is unlikely. Our research covering the last 18 years indicates that hedge funds’ stock picks generate superior risk-adjusted returns. That’s why we believe it is wise to check hedge fund activity before you invest your time or your savings on a stock like The First of Long Island Corporation (NASDAQ:FLIC).
The First of Long Island Corporation (NASDAQ:FLIC) was in 12 hedge funds’ portfolios at the end of the third quarter of 2018. FLIC investors should pay attention to an increase in hedge fund sentiment of late. There were 10 hedge funds in our database with FLIC positions at the end of the previous quarter. Our calculations also showed that flic isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are a multitude of methods shareholders put to use to analyze their stock investments. A pair of the most underrated methods are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the top picks of the elite investment managers can outclass the market by a very impressive margin (see the details here).
Let’s take a look at the new hedge fund action encompassing The First of Long Island Corporation (NASDAQ:FLIC).
Hedge fund activity in The First of Long Island Corporation (NASDAQ:FLIC)
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 20% from the second quarter of 2018. Below, you can check out the change in hedge fund sentiment towards FLIC over the last 13 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of The First of Long Island Corporation (NASDAQ:FLIC), with a stake worth $13.2 million reported as of the end of September. Trailing Renaissance Technologies was Diamond Hill Capital, which amassed a stake valued at $11.2 million. Basswood Capital, Millennium Management, and Chilton Investment Company were also very fond of the stock, giving the stock large weights in their portfolios.
As one would reasonably expect, key money managers were breaking ground themselves. MFP Investors, managed by Michael Price, initiated the most valuable position in The First of Long Island Corporation (NASDAQ:FLIC). MFP Investors had $1.1 million invested in the company at the end of the quarter. Chuck Royce’s Royce & Associates also initiated a $0 million position during the quarter.
Let’s also examine hedge fund activity in other stocks similar to The First of Long Island Corporation (NASDAQ:FLIC). These stocks are Duff & Phelps Global Utility Income Fund Inc. (NYSE:DPG), Ethan Allen Interiors Inc. (NYSE:ETH), Hemisphere Media Group Inc (NASDAQ:HMTV), and Altisource Portfolio Solutions S.A. (NASDAQ:ASPS). This group of stocks’ market valuations are similar to FLIC’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DPG | 1 | 263 | 0 |
| ETH | 12 | 59323 | -1 |
| HMTV | 8 | 50459 | 0 |
| ASPS | 12 | 71906 | 3 |
| Average | 8.25 | 45488 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.25 hedge funds with bullish positions and the average amount invested in these stocks was $45 million. That figure was $41 million in FLIC’s case. Ethan Allen Interiors Inc. (NYSE:ETH) is the most popular stock in this table. On the other hand Duff & Phelps Global Utility Income Fund Inc. (NYSE:DPG) is the least popular one with only 1 bullish hedge fund positions. The First of Long Island Corporation (NASDAQ:FLIC) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ETH might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
