Smart Money Is Losing Confidence In Community Trust Bancorp, Inc. (CTBI)

We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file with the government. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those investors think of Community Trust Bancorp, Inc. (NASDAQ:CTBI).

Community Trust Bancorp, Inc. (NASDAQ:CTBI) was in 4 hedge funds’ portfolios at the end of September. Investors should pay attention to a decrease in hedge fund interest in recent months, since there were 6 hedge funds in our database with Community Trust Bancorp, Inc. (NASDAQ:CTBI) holdings at the end of the previous quarter. At the end of this article, we will also compare Community Trust Bancorp, Inc. (NASDAQ:CTBI) to other stocks, including Hemisphere Media Group Inc (NASDAQ:HMTV), Albany Molecular Research, Inc. (NASDAQ:AMRI), and TTM Technologies, Inc. (NASDAQ:TTMI) to get a better sense of its popularity.

According to most traders, hedge funds are assumed to be slow, outdated investment tools of the past. While there are greater than 8000 funds in operation at the moment, our researchers look at the top tier of this club, around 700 funds. Most estimates calculate that this group of people shepherd bulk of the hedge fund industry’s total asset base, and by monitoring their finest picks, Insider Monkey has deciphered several investment strategies that have historically outpaced the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points per annum for a decade in their back tests.

Keeping this in mind, let’s view the new action surrounding Community Trust Bancorp, Inc. (NASDAQ:CTBI).

How have hedgies been trading Community Trust Bancorp, Inc. (NASDAQ:CTBI)?

At the end of Q3, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a decrease of 33% from the second quarter. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies holds the number one position in Community Trust Bancorp, Inc. (NASDAQ:CTBI). The fund has a $3 million position in the stock, comprising less than 0.1% of its 13F portfolio. The second most bullish fund manager is Bryn Mawr Capital, managed by Ken Gray and Steve Walsh, which holds a $0.5 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors that hold long positions encompass John Overdeck and David Siegel’s Two Sigma Advisors and Israel Englander’s Millennium Management.

Because Community Trust Bancorp, Inc. (NASDAQ:CTBI) has faced a declination in the interest from the entirety of the hedge funds we track, it’s easy to see that there lies a certain “tier” of hedge funds who sold off their entire stakes heading into Q4. It’s worth mentioning that Roger Ibbotson’s Zebra Capital Management dumped the largest position of all the hedgies followed by Insider Monkey, valued at about $0.4 million in stock. Peter Rathjens, Bruce Clarke and John Campbell’s fund, Arrowstreet Capital, also cut its stock, about $0.2 million worth of shares. These bearish behaviors are interesting, as total hedge fund interest was cut by 2 funds heading into Q4.

Let’s now review hedge fund activity in other stocks similar to Community Trust Bancorp, Inc. (NASDAQ:CTBI). These stocks are Hemisphere Media Group Inc (NASDAQ:HMTV), Albany Molecular Research, Inc. (NASDAQ:AMRI), TTM Technologies, Inc. (NASDAQ:TTMI), and Workiva Inc (NYSE:WK). This group of stocks’ market caps is similar to Community Trust Bancorp, Inc. (NASDAQ:CTBI)’s market cap.

As you can see, these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $89 million. That figure was only $4 million in Community Trust Bancorp, Inc. (NASDAQ:CTBI)’s case. TTM Technologies, Inc. (NASDAQ:TTMI) topped the list of stocks under consideration, in terms of the number of hedge fund holdings, whereas Workiva Inc (NYSE:WK) remained at the bottom, with four bullish hedge fund positions. Compared to these stocks, Community Trust Bancorp, Inc. (NASDAQ:CTBI) holds the same rank as that of Workiva Inc (NYSE:WK). Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case, more research is warranted.