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Is BankFinancial Corporation (BFIN) A Good Investment Now?

·6 min read

The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards BankFinancial Corporation (NASDAQ:BFIN).

BankFinancial Corporation (NASDAQ:BFIN) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 4 hedge funds' portfolios at the end of September. Our calculations also showed that BFIN 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). 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 Reading International Inc (NASDAQ:RDIB), Reading International, Inc. (NASDAQ:RDI), and SPI Energy Co., Ltd. (NASDAQ:SPI) to gather more data points.

Video: Watch our video about the top 5 most popular hedge fund stocks.

In the financial world there are a multitude of tools market participants use to assess publicly traded companies. A couple of the most innovative tools are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the best picks of the elite fund managers can outclass their index-focused peers by a superb amount (see the details here).

John Overdeck of Two Sigma
John Overdeck of Two Sigma

John Overdeck of Two Sigma 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. With all of this in mind let's check out the recent hedge fund action encompassing BankFinancial Corporation (NASDAQ:BFIN).

What have hedge funds been doing with BankFinancial Corporation (NASDAQ:BFIN)?

At the end of the third quarter, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the second quarter of 2020. On the other hand, there were a total of 6 hedge funds with a bullish position in BFIN a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is BFIN A Good Stock To Buy?
Is BFIN A Good Stock To Buy?

Of the funds tracked by Insider Monkey, Renaissance Technologies, holds the biggest position in BankFinancial Corporation (NASDAQ:BFIN). Renaissance Technologies has a $7.3 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Winton Capital Management, led by David Harding, holding a $0.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers with similar optimism comprise John Overdeck and David Siegel's Two Sigma Advisors, Israel Englander's Millennium Management and . In terms of the portfolio weights assigned to each position Winton Capital Management allocated the biggest weight to BankFinancial Corporation (NASDAQ:BFIN), around 0.01% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, setting aside 0.01 percent of its 13F equity portfolio to BFIN.

Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren't any hedge funds dumping their holdings during the third quarter, there weren't any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven't identified any viable catalysts that can attract investor attention.

Let's check out hedge fund activity in other stocks - not necessarily in the same industry as BankFinancial Corporation (NASDAQ:BFIN) but similarly valued. We will take a look at Reading International Inc (NASDAQ:RDIB), Reading International, Inc. (NASDAQ:RDI), SPI Energy Co., Ltd. (NASDAQ:SPI), Key Tronic Corporation (NASDAQ:KTCC), Eloxx Pharmaceuticals, Inc. (NASDAQ:ELOX), PC Tel Inc (NASDAQ:PCTI), and Safe Bulkers, Inc. (NYSE:SB). This group of stocks' market valuations are closest to BFIN's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RDIB,1,267,0 RDI,8,12477,-6 SPI,1,3065,0 KTCC,1,1248,0 ELOX,1,157,0 PCTI,9,19681,-1 SB,6,5501,1 Average,3.9,6057,-0.9 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 3.9 hedge funds with bullish positions and the average amount invested in these stocks was $6 million. That figure was $8 million in BFIN's case. PC Tel Inc (NASDAQ:PCTI) is the most popular stock in this table. On the other hand Reading International Inc (NASDAQ:RDIB) is the least popular one with only 1 bullish hedge fund positions. BankFinancial Corporation (NASDAQ:BFIN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BFIN is 40.9. 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. Hedge funds were also right about betting on BFIN as the stock returned 17.6% since the end of Q3 (through 11/27) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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

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