Where Do Hedge Funds Stand On FS Bancorp, Inc. (FSBW)?

In this article we will check out the progression of hedge fund sentiment towards FS Bancorp, Inc. (NASDAQ:FSBW) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.

FS Bancorp, Inc. (NASDAQ:FSBW) has seen an increase in activity from the world’s largest hedge funds recently. FS Bancorp, Inc. (NASDAQ:FSBW) was in 5 hedge funds’ portfolios at the end of September. The all time high for this statistics is 10. Our calculations also showed that FSBW 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.

To most stock holders, hedge funds are assumed to be unimportant, old investment tools of years past. While there are greater than 8000 funds in operation at the moment, Our experts hone in on the aristocrats of this club, about 850 funds. These investment experts manage the majority of all hedge funds’ total capital, and by tailing their unrivaled investments, Insider Monkey has formulated numerous investment strategies that have historically exceeded the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .

Phil Stone of Fourthstone LLC

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 15 best blue chip stocks 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. Now let’s view the latest hedge fund action encompassing FS Bancorp, Inc. (NASDAQ:FSBW).

Hedge fund activity in FS Bancorp, Inc. (NASDAQ:FSBW)

At the end of the third quarter, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards FSBW over the last 21 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, EJF Capital, managed by Emanuel J. Friedman, holds the most valuable position in FS Bancorp, Inc. (NASDAQ:FSBW). EJF Capital has a $6.7 million position in the stock, comprising 0.6% of its 13F portfolio. The second largest stake is Renaissance Technologies, with a $3.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining members of the smart money that are bullish encompass Phil Stone’s Fourthstone LLC, Israel Englander’s Millennium Management and David M. Knott’s Dorset Management. In terms of the portfolio weights assigned to each position Fourthstone LLC allocated the biggest weight to FS Bancorp, Inc. (NASDAQ:FSBW), around 1.36% of its 13F portfolio. EJF Capital is also relatively very bullish on the stock, setting aside 0.56 percent of its 13F equity portfolio to FSBW.

As aggregate interest increased, specific money managers were leading the bulls’ herd. Fourthstone LLC, managed by Phil Stone, assembled the biggest position in FS Bancorp, Inc. (NASDAQ:FSBW). Fourthstone LLC had $1.6 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $0.2 million position during the quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as FS Bancorp, Inc. (NASDAQ:FSBW) but similarly valued. These stocks are Aurora Mobile Limited (NASDAQ:JG), Sky Solar Holdings, Ltd. (NASDAQ:SKYS), Taiwan Liposome Company, Ltd. (NASDAQ:TLC), Hertz Global Holdings, Inc. (NYSE:HTZ), Lifevantage Corporation (NASDAQ:LFVN), Cerecor Inc. (NASDAQ:CERC), and Five Prime Therapeutics Inc (NASDAQ:FPRX). This group of stocks’ market caps are similar to FSBW’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 6.6 hedge funds with bullish positions and the average amount invested in these stocks was $25 million. That figure was $12 million in FSBW’s case. Five Prime Therapeutics Inc (NASDAQ:FPRX) is the most popular stock in this table. On the other hand Aurora Mobile Limited (NASDAQ:JG) is the least popular one with only 1 bullish hedge fund positions. FS Bancorp, Inc. (NASDAQ:FSBW) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for FSBW is 32.1. 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 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 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on FSBW as the stock returned 26.2% since the end of the third quarter (through 11/27) and outperformed the market by an even larger margin.

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