The Insider Monkey team has completed processing the quarterly 13F filings for the March quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards OP Bancorp (NASDAQ:OPBK).
OP Bancorp (NASDAQ:OPBK) has seen an increase in activity from the world’s largest hedge funds lately. OP Bancorp (NASDAQ:OPBK) was in 6 hedge funds’ portfolios at the end of March. The all time high for this statistic is 7. Our calculations also showed that OPBK isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Michael Gelband of ExodusPoint Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $24 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery 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 let’s review the recent hedge fund action regarding OP Bancorp (NASDAQ:OPBK).
Do Hedge Funds Think OPBK Is A Good Stock To Buy Now?
At the end of March, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a change of 50% from the fourth quarter of 2020. By comparison, 6 hedge funds held shares or bullish call options in OPBK a year ago. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Emanuel J. Friedman’s EJF Capital has the largest position in OP Bancorp (NASDAQ:OPBK), worth close to $9 million, amounting to 0.7% of its total 13F portfolio. Coming in second is Renaissance Technologies, holding a $2.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining professional money managers with similar optimism comprise Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Chuck Royce’s Royce & Associates and Michael Gelband’s ExodusPoint Capital. In terms of the portfolio weights assigned to each position EJF Capital allocated the biggest weight to OP Bancorp (NASDAQ:OPBK), around 0.65% of its 13F portfolio. ExodusPoint Capital is also relatively very bullish on the stock, designating 0.0029 percent of its 13F equity portfolio to OPBK.
Consequently, specific money managers were leading the bulls’ herd. Royce & Associates, managed by Chuck Royce, established the most valuable position in OP Bancorp (NASDAQ:OPBK). Royce & Associates had $0.3 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also initiated a $0.2 million position during the quarter. The only other fund with a brand new OPBK position is Israel Englander’s Millennium Management.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as OP Bancorp (NASDAQ:OPBK) but similarly valued. We will take a look at Catalyst Biosciences Inc (NASDAQ:CBIO), Grupo Supervielle S.A. (NYSE:SUPV), Synchronoss Technologies, Inc. (NASDAQ:SNCR), 180 Life Sciences Corp. (NASDAQ:ATNF), PhaseBio Pharmaceuticals, Inc. (NASDAQ:PHAS), MainStreet Bancshares, Inc. (NASDAQ:MNSB), and Repro Med Systems, Inc. (NASDAQ:KRMD). This group of stocks’ market caps are similar to OPBK’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CBIO | 16 | 65034 | 1 |
| SUPV | 2 | 120 | -3 |
| SNCR | 9 | 8448 | -1 |
| ATNF | 4 | 1519 | -1 |
| PHAS | 7 | 27505 | 0 |
| MNSB | 2 | 9781 | -1 |
| KRMD | 11 | 5871 | -2 |
| Average | 7.3 | 16897 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.3 hedge funds with bullish positions and the average amount invested in these stocks was $17 million. That figure was $12 million in OPBK’s case. Catalyst Biosciences Inc (NASDAQ:CBIO) is the most popular stock in this table. On the other hand Grupo Supervielle S.A. (NYSE:SUPV) is the least popular one with only 2 bullish hedge fund positions. OP Bancorp (NASDAQ:OPBK) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for OPBK is 47. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 19.3% in 2021 through June 25th and surpassed the market again by 4.8 percentage points. Unfortunately OPBK wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); OPBK investors were disappointed as the stock returned -5.7% since the end of March (through 6/25) 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 in 2021.
Follow Op Bancorp (NASDAQ:OPBK)
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Disclosure: None. This article was originally published at Insider Monkey.
