Should I Avoid Full House Resorts, Inc. (FLL)?

The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on June 30th. We at Insider Monkey have made an extensive database of more than 873 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Full House Resorts, Inc. (NASDAQ:FLL) based on those filings.

Full House Resorts, Inc. (NASDAQ:FLL) was in 19 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 21. FLL shareholders have witnessed a decrease in support from the world’s most elite money managers of late. There were 21 hedge funds in our database with FLL holdings at the end of March. Our calculations also showed that FLL isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Jim Simons of Renaissance Technologies

With all of this in mind let’s take a look at the latest hedge fund action encompassing Full House Resorts, Inc. (NASDAQ:FLL).

Do Hedge Funds Think FLL Is A Good Stock To Buy Now?

At Q2’s end, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -10% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in FLL over the last 24 quarters. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).

The largest stake in Full House Resorts, Inc. (NASDAQ:FLL) was held by Portolan Capital Management, which reported holding $23.7 million worth of stock at the end of June. It was followed by Driehaus Capital with a $15.6 million position. Other investors bullish on the company included Renaissance Technologies, DG Capital Management, and Kettle Hill Capital Management. In terms of the portfolio weights assigned to each position DG Capital Management allocated the biggest weight to Full House Resorts, Inc. (NASDAQ:FLL), around 2.6% of its 13F portfolio. Portolan Capital Management is also relatively very bullish on the stock, dishing out 1.71 percent of its 13F equity portfolio to FLL.

Since Full House Resorts, Inc. (NASDAQ:FLL) has experienced bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there were a few hedge funds that decided to sell off their positions entirely in the second quarter. It’s worth mentioning that Brian Gustavson and Andrew Haley’s 1060 Capital Management sold off the biggest investment of the 750 funds monitored by Insider Monkey, totaling close to $5.1 million in stock, and Ravee Mehta’s Nishkama Capital was right behind this move, as the fund sold off about $2.2 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 2 funds in the second quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Full House Resorts, Inc. (NASDAQ:FLL) but similarly valued. We will take a look at Sigilon Therapeutics, Inc. (NASDAQ:SGTX), EZCORP Inc (NASDAQ:EZPW), Syros Pharmaceuticals, Inc. (NASDAQ:SYRS), VOXX International Corp (NASDAQ:VOXX), Tufin Software Technologies Ltd. (NYSE:TUFN), Opthea Limited (NASDAQ:OPT), and Regis Corporation (NYSE:RGS). This group of stocks’ market values are closest to FLL’s market value.

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As you can see these stocks had an average of 10.9 hedge funds with bullish positions and the average amount invested in these stocks was $34 million. That figure was $83 million in FLL’s case. EZCORP Inc (NASDAQ:EZPW) is the most popular stock in this table. On the other hand Opthea Limited (NASDAQ:OPT) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Full House Resorts, Inc. (NASDAQ:FLL) is more popular among hedge funds. Our overall hedge fund sentiment score for FLL is 80.1. 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 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 returned 24% in 2021 through October 22nd but still managed to beat the market by 1.6 percentage points. Hedge funds were also right about betting on FLL as the stock returned 12.1% since the end of June (through 10/22) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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Disclosure: None. This article was originally published at Insider Monkey.

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