Should You Buy The Bancorp, Inc. (TBBK)?

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Hedge fund interest in The Bancorp, Inc. (NASDAQ:TBBK) shares was flat at the end of last quarter. This is usually a negative indicator. 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 Telenav Inc (NASDAQ:TNAV), Eaton Vance Senior Income Trust (NYSE:EVF), and Ultra Clean Holdings Inc (NASDAQ:UCTT) to gather more data points.

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Keeping this in mind, let’s go over the new action surrounding The Bancorp, Inc. (NASDAQ:TBBK).

What have hedge funds been doing with The Bancorp, Inc. (NASDAQ:TBBK)?

Heading into the fourth quarter of 2016, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in TBBK over the last 5 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Nantahala Capital Management, led by Wilmot B. Harkey and Daniel Mack, holds the number one position in The Bancorp, Inc. (NASDAQ:TBBK). Nantahala Capital Management has a $27.2 million position in the stock, comprising 3.3% of its 13F portfolio. Coming in second is Second Curve Capital, led by Tom Brown, holding a $15.4 million position; the fund has 8.8% of its 13F portfolio invested in the stock. Remaining members of the smart money that hold long positions contain Robert I. Usdan and Wayne K. Goldstein’s Endicott Management, David Brown’s Hawk Ridge Management and Michael Price’s MFP Investors. We should note that two of these hedge funds (Nantahala Capital Management and MFP Investors) 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.

Judging by the fact that The Bancorp, Inc. (NASDAQ:TBBK) has faced bearish sentiment from the smart money, it’s easy to see that there is a sect of money managers that elected to cut their entire stakes heading into Q4. Interestingly, Cliff Asness’s AQR Capital Management sold off the largest investment of the “upper crust” of funds monitored by Insider Monkey, totaling close to $0.1 million in stock. Ken Griffin’s fund, Citadel Investment Group, also dumped its stock, about $0.1 million worth.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as The Bancorp, Inc. (NASDAQ:TBBK) but similarly valued. We will take a look at Telenav Inc (NASDAQ:TNAV), Eaton Vance Senior Income Trust (NYSE:EVF), Ultra Clean Holdings Inc (NASDAQ:UCTT), and Marlin Business Services Corp. (NASDAQ:MRLN). All of these stocks’ market caps resemble TBBK’s market cap.

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 $37 million. That figure was $64 million in TBBK’s case. Ultra Clean Holdings Inc (NASDAQ:UCTT) is the most popular stock in this table. On the other hand Eaton Vance Senior Income Trust (NYSE:EVF) is the least popular one with only 3 bullish hedge fund positions. The Bancorp, Inc. (NASDAQ:TBBK) 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 UCTT might be a better candidate to consider taking a long position in.