The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 873 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th. In this article we look at what those investors think of TowneBank (NASDAQ:TOWN).
TowneBank (NASDAQ:TOWN) was in 10 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 12. TOWN investors should pay attention to an increase in hedge fund interest in recent months. There were 9 hedge funds in our database with TOWN positions at the end of the first quarter. Our calculations also showed that TOWN isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
In the 21st century investor’s toolkit there are several signals shareholders can use to grade their stock investments. A duo of the most under-the-radar signals are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the best picks of the best hedge fund managers can outperform their index-focused peers by a very impressive margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website .
Cliff Asness of AQR Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Keeping this in mind we’re going to view the latest hedge fund action regarding TowneBank (NASDAQ:TOWN).
Do Hedge Funds Think TOWN Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 11% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards TOWN over the last 24 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies has the biggest position in TowneBank (NASDAQ:TOWN), worth close to $24.3 million, accounting for less than 0.1%% of its total 13F portfolio. Coming in second is Royce & Associates, led by Chuck Royce, holding a $10.5 million position; 0.1% of its 13F portfolio is allocated to the company. Other peers that hold long positions comprise Israel Englander’s Millennium Management, Cliff Asness’s AQR Capital Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. In terms of the portfolio weights assigned to each position Royce & Associates allocated the biggest weight to TowneBank (NASDAQ:TOWN), around 0.07% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, designating 0.03 percent of its 13F equity portfolio to TOWN.
As one would reasonably expect, specific money managers have been driving this bullishness. GLG Partners, managed by Noam Gottesman, created the most outsized position in TowneBank (NASDAQ:TOWN). GLG Partners had $0.4 million invested in the company at the end of the quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as TowneBank (NASDAQ:TOWN) but similarly valued. These stocks are Paramount Group Inc (NYSE:PGRE), Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (NYSE:VLRS), ALX Oncology Holdings Inc. (NASDAQ:ALXO), Zentalis Pharmaceuticals, Inc. (NASDAQ:ZNTL), Everi Holdings Inc (NYSE:EVRI), Echostar Corporation (NASDAQ:SATS), and KAR Auction Services Inc (NYSE:KAR). All of these stocks’ market caps are closest to TOWN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PGRE | 17 | 147529 | 0 |
| VLRS | 16 | 253576 | 2 |
| ALXO | 16 | 533205 | 5 |
| ZNTL | 24 | 680636 | 8 |
| EVRI | 31 | 319071 | 7 |
| SATS | 26 | 246543 | -2 |
| KAR | 23 | 284975 | 1 |
| Average | 21.9 | 352219 | 3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.9 hedge funds with bullish positions and the average amount invested in these stocks was $352 million. That figure was $42 million in TOWN’s case. Everi Holdings Inc (NYSE:EVRI) is the most popular stock in this table. On the other hand Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (NYSE:VLRS) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks TowneBank (NASDAQ:TOWN) is even less popular than VLRS. Our overall hedge fund sentiment score for TOWN is 31. 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. Hedge funds dodged a bullet by taking a bearish stance towards TOWN. Our calculations showed that the top 5 most popular hedge fund stocks returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 25.7% in 2021 through September 27th but managed to beat the market again by 6.2 percentage points. Unfortunately TOWN wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was very bearish); TOWN investors were disappointed as the stock returned 2.9% since the end of the second quarter (through 9/27) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
