The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity 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 September 30th, about a month before the elections. We at Insider Monkey have made an extensive database of more than 817 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Business First Bancshares, Inc. (NASDAQ:BFST) based on those filings.
Business First Bancshares, Inc. (NASDAQ:BFST) was in 3 hedge funds’ portfolios at the end of September. The all time high for this statistics is 5. BFST shareholders have witnessed a decrease in activity from the world’s largest hedge funds lately. There were 5 hedge funds in our database with BFST holdings at the end of June. Our calculations also showed that BFST isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In today’s marketplace there are plenty of methods stock market investors employ to evaluate their stock investments. A duo of the most innovative methods are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the best picks of the best fund managers can outpace the broader indices by a healthy amount (see the details here).
Anton Schutz of Mendon Capital Advisors
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website. With all of this in mind we’re going to check out the key hedge fund action surrounding Business First Bancshares, Inc. (NASDAQ:BFST).
What does smart money think about Business First Bancshares, Inc. (NASDAQ:BFST)?
At the end of September, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -40% from the previous quarter. By comparison, 2 hedge funds held shares or bullish call options in BFST a year ago. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Emanuel J. Friedman’s EJF Capital has the largest position in Business First Bancshares, Inc. (NASDAQ:BFST), worth close to $8.6 million, corresponding to 0.7% of its total 13F portfolio. The second largest stake is held by Mendon Capital Advisors, led by Anton Schutz, holding a $1.1 million position; 0.6% of its 13F portfolio is allocated to the company. In terms of the portfolio weights assigned to each position EJF Capital allocated the biggest weight to Business First Bancshares, Inc. (NASDAQ:BFST), around 0.71% of its 13F portfolio. Mendon Capital Advisors is also relatively very bullish on the stock, earmarking 0.62 percent of its 13F equity portfolio to BFST.
Seeing as Business First Bancshares, Inc. (NASDAQ:BFST) has witnessed falling interest from the aggregate hedge fund industry, it’s easy to see that there lies a certain “tier” of fund managers that elected to cut their positions entirely heading into Q4. At the top of the heap, David Harding’s Winton Capital Management cut the largest position of all the hedgies followed by Insider Monkey, totaling about $0.9 million in stock. Israel Englander’s fund, Millennium Management, also said goodbye to its stock, about $0.2 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 2 funds heading into Q4.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Business First Bancshares, Inc. (NASDAQ:BFST) but similarly valued. These stocks are DSP Group, Inc. (NASDAQ:DSPG), OptimizeRx Corporation (NASDAQ:OPRX), Meten EdtechX Education Group Ltd. (NASDAQ:METX), Conn’s, Inc. (NASDAQ:CONN), HBT Financial, Inc. (NASDAQ:HBT), Galiano Gold Inc. (NYSE:GAU), and Willdan Group, Inc. (NASDAQ:WLDN). This group of stocks’ market values match BFST’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DSPG | 14 | 57122 | -2 |
| OPRX | 4 | 28598 | -1 |
| METX | 3 | 72 | 0 |
| CONN | 14 | 21354 | -2 |
| HBT | 9 | 10415 | 3 |
| GAU | 6 | 42056 | 1 |
| WLDN | 3 | 8995 | -1 |
| Average | 7.6 | 24087 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.6 hedge funds with bullish positions and the average amount invested in these stocks was $24 million. That figure was $10 million in BFST’s case. DSP Group, Inc. (NASDAQ:DSPG) is the most popular stock in this table. On the other hand Meten EdtechX Education Group Ltd. (NASDAQ:METX) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Business First Bancshares, Inc. (NASDAQ:BFST) is even less popular than METX. Our overall hedge fund sentiment score for BFST is 21. 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. Hedge funds clearly dropped the ball on BFST as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 28.1% in 2020 through November 23rd and still beat the market by 15.4 percentage points. A small number of hedge funds were also right about betting on BFST as the stock returned 30% since Q3 (through November 23rd) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
