Where Do Hedge Funds Stand On Eastern Bankshares, Inc. (EBC)?

Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards Eastern Bankshares, Inc. (NASDAQ:EBC) changed recently.

Eastern Bankshares, Inc. (NASDAQ:EBC) has experienced an increase in support from the world’s most elite money managers recently. Eastern Bankshares, Inc. (NASDAQ:EBC) was in 20 hedge funds’ portfolios at the end of June. The all time high for this statistic was previously 16. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 14 hedge funds in our database with EBC holdings at the end of March. Our calculations also showed that EBC isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Richard Driehaus of Driehaus Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, plant based food market is expected to explode 100-fold by 2050, so we are checking out this under-the-radar stock. We go through lists like the 10 best growth stocks to buy to pick the next Tesla that will deliver a 10x return. 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 homepage. Keeping this in mind we’re going to check out the key hedge fund action regarding Eastern Bankshares, Inc. (NASDAQ:EBC).

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

At the end of the second quarter, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 43% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in EBC over the last 24 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.

The largest stake in Eastern Bankshares, Inc. (NASDAQ:EBC) was held by Newtyn Management, which reported holding $33.9 million worth of stock at the end of June. It was followed by Driehaus Capital with a $21.3 million position. Other investors bullish on the company included Millennium Management, Private Capital Management, and Renaissance Technologies. In terms of the portfolio weights assigned to each position Newtyn Management allocated the biggest weight to Eastern Bankshares, Inc. (NASDAQ:EBC), around 9.4% of its 13F portfolio. Dorset Management is also relatively very bullish on the stock, designating 1.46 percent of its 13F equity portfolio to EBC.

Now, specific money managers were breaking ground themselves. Renaissance Technologies, created the largest position in Eastern Bankshares, Inc. (NASDAQ:EBC). Renaissance Technologies had $7.1 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $1.9 million position during the quarter. The other funds with brand new EBC positions are Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, Michael Gelband’s ExodusPoint Capital, and Karim Abbadi and Edward McBride’s Centiva Capital.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Eastern Bankshares, Inc. (NASDAQ:EBC) but similarly valued. We will take a look at Denbury Inc. (NYSE:DEN), Southwest Gas Holdings, Inc. (NYSE:SWX), Southwestern Energy Company (NYSE:SWN), Turning Point Therapeutics, Inc. (NASDAQ:TPTX), Dillard’s, Inc. (NYSE:DDS), The Brink’s Company (NYSE:BCO), and Papa John’s International, Inc. (NASDAQ:PZZA). This group of stocks’ market values are closest to EBC’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $461 million. That figure was $115 million in EBC’s case. Papa John’s International, Inc. (NASDAQ:PZZA) is the most popular stock in this table. On the other hand The Brink’s Company (NYSE:BCO) is the least popular one with only 17 bullish hedge fund positions. Eastern Bankshares, Inc. (NASDAQ:EBC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for EBC is 51.5. 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 gained 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. A small number of hedge funds were also right about betting on EBC as the stock returned 3.3% since the end of the second quarter (through 10/22) and outperformed the market by an even larger margin.

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