Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those successful funds in these small-cap stocks. In the following paragraphs, we analyze Bryn Mawr Bank Corp. (NASDAQ:BMTC) from the perspective of those successful funds.
Bryn Mawr Bank Corp. (NASDAQ:BMTC) investors should be aware of an increase in hedge fund interest lately. There were 8 hedge funds in our database with BMTC holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Triple-S Management Corp.(NYSE:GTS), Bellicum Pharmaceuticals Inc (NASDAQ:BLCM), and Heritage Financial Corporation (NASDAQ:HFWA) to gather more data points.
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We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.
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With all of this in mind, let’s check out the latest action surrounding Bryn Mawr Bank Corp. (NASDAQ:BMTC).
What does the smart money think about Bryn Mawr Bank Corp. (NASDAQ:BMTC)?
At the end of the third quarter, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 38% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards BMTC over the last 5 quarters. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Basswood Capital, led by Matthew Lindenbaum, holds the most valuable position in Bryn Mawr Bank Corp. (NASDAQ:BMTC). Basswood Capital has a $18.9 million position in the stock, comprising 0.9% of its 13F portfolio. Coming in second is Renaissance Technologies, one of the largest hedge funds in the world, holding a $15.9 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Some other peers that hold long positions contain Paul Hondros’s AlphaOne Capital Partners, Bernard Horn’s Polaris Capital Management and D E Shaw. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Consequently, specific money managers have been driving this bullishness. Millennium Management, led by Israel Englander, established the largest position in Bryn Mawr Bank Corp. (NASDAQ:BMTC). Millennium Management had $0.5 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0.4 million position during the quarter. The only other fund with a brand new BMTC position is Cliff Asness’s AQR Capital Management.
Let’s now take a look at hedge fund activity in other stocks similar to Bryn Mawr Bank Corp. (NASDAQ:BMTC). We will take a look at Triple-S Management Corp.(NYSE:GTS), Bellicum Pharmaceuticals Inc (NASDAQ:BLCM), Heritage Financial Corporation (NASDAQ:HFWA), and Flexion Therapeutics Inc (NASDAQ:FLXN). This group of stocks’ market valuations resemble BMTC’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GTS | 10 | 88928 | -3 |
| BLCM | 3 | 104833 | -1 |
| HFWA | 12 | 23687 | -1 |
| FLXN | 8 | 40444 | -3 |
As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $64 million. That figure was $44 million in BMTC’s case. Heritage Financial Corporation (NASDAQ:HFWA) is the most popular stock in this table. On the other hand Bellicum Pharmaceuticals Inc (NASDAQ:BLCM) is the least popular one with only 3 bullish hedge fund positions. Bryn Mawr Bank Corp. (NASDAQ:BMTC) 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 HFWA might be a better candidate to consider taking a long position in.
