We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Peltz’s recent General Electric losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Timberland Bancorp, Inc. (NASDAQ:TSBK).
Is Timberland Bancorp, Inc. (NASDAQ:TSBK) going to take off soon? Money managers were turning bullish. The number of long hedge fund positions improved by 1 in recent months. Timberland Bancorp, Inc. (NASDAQ:TSBK) was in 4 hedge funds’ portfolios at the end of September. The all time high for this statistics is 5. Our calculations also showed that TSBK 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). There were 3 hedge funds in our database with TSBK positions at the end of the second quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Today there are tons of tools investors employ to grade their holdings. A pair of the best tools are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the top picks of the best investment managers can outperform the market by a significant margin (see the details here).
Roger Ibbotson of Zebra Capital Management
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. Keeping this in mind let’s view the key hedge fund action encompassing Timberland Bancorp, Inc. (NASDAQ:TSBK).
How have hedgies been trading Timberland Bancorp, Inc. (NASDAQ:TSBK)?
At the end of September, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards TSBK over the last 21 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Royce & Associates, managed by Chuck Royce, holds the most valuable position in Timberland Bancorp, Inc. (NASDAQ:TSBK). Royce & Associates has a $9 million position in the stock, comprising 0.1% of its 13F portfolio. On Royce & Associates’s heels is Renaissance Technologies, with a $6.8 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other members of the smart money with similar optimism consist of Matthew Lindenbaum’s Basswood Capital, Roger Ibbotson’s Zebra Capital Management and . In terms of the portfolio weights assigned to each position Zebra Capital Management allocated the biggest weight to Timberland Bancorp, Inc. (NASDAQ:TSBK), around 0.38% of its 13F portfolio. Basswood Capital is also relatively very bullish on the stock, earmarking 0.18 percent of its 13F equity portfolio to TSBK.
With a general bullishness amongst the heavyweights, specific money managers were leading the bulls’ herd. Zebra Capital Management, managed by Roger Ibbotson, established the most valuable position in Timberland Bancorp, Inc. (NASDAQ:TSBK). Zebra Capital Management had $0.2 million invested in the company at the end of the quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Timberland Bancorp, Inc. (NASDAQ:TSBK) but similarly valued. These stocks are Penn Virginia Corporation (NASDAQ:PVAC), Ramaco Resources, Inc. (NASDAQ:METC), Tsakos Energy Navigation Ltd. (NYSE:TNP), Horizon Global Corp (NYSE:HZN), Ayala Pharmaceuticals, Inc. (NASDAQ:AYLA), Corbus Pharmaceuticals Holdings Inc (NASDAQ:CRBP), and BioSig Technologies, Inc. (NASDAQ:BSGM). This group of stocks’ market valuations resemble TSBK’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PVAC | 9 | 25550 | -2 |
| METC | 6 | 2809 | -3 |
| TNP | 4 | 11320 | -5 |
| HZN | 3 | 16612 | 0 |
| AYLA | 3 | 10125 | -1 |
| CRBP | 8 | 16655 | -6 |
| BSGM | 3 | 294 | 0 |
| Average | 5.1 | 11909 | -2.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.1 hedge funds with bullish positions and the average amount invested in these stocks was $12 million. That figure was $18 million in TSBK’s case. Penn Virginia Corporation (NASDAQ:PVAC) is the most popular stock in this table. On the other hand Horizon Global Corp (NYSE:HZN) is the least popular one with only 3 bullish hedge fund positions. Timberland Bancorp, Inc. (NASDAQ:TSBK) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for TSBK is 38.3. 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 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on TSBK as the stock returned 37% since the end of the third quarter (through 11/27) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
