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The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 817 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of September 30th, about a month before the elections. In this article we look at what those investors think of Banner Corporation (NASDAQ:BANR).
Is BANR a good stock to buy now? Hedge fund interest in Banner Corporation (NASDAQ:BANR) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that BANR 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 The Bank of N.T. Butterfield & Son Limited (NYSE:NTB), Repare Therapeutics Inc. (NASDAQ:RPTX), and Tronox Holdings Plc (NYSE:TROX) to gather more data points.
Video: Watch our video about the top 5 most popular hedge fund stocks.
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 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Fred Cummings of Elizabeth Park Capital
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. Keeping this in mind let's take a peek at the latest hedge fund action regarding Banner Corporation (NASDAQ:BANR).
Do Hedge Funds Think BANR Is A Good Stock To Buy Now?
At Q3's end, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. By comparison, 15 hedge funds held shares or bullish call options in BANR a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Citadel Investment Group was the largest shareholder of Banner Corporation (NASDAQ:BANR), with a stake worth $17.4 million reported as of the end of September. Trailing Citadel Investment Group was Forest Hill Capital, which amassed a stake valued at $7.9 million. Elizabeth Park Capital Management, Arrowstreet Capital, and D E Shaw were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Forest Hill Capital allocated the biggest weight to Banner Corporation (NASDAQ:BANR), around 3.61% of its 13F portfolio. Elizabeth Park Capital Management is also relatively very bullish on the stock, setting aside 3.01 percent of its 13F equity portfolio to BANR.
Seeing as Banner Corporation (NASDAQ:BANR) has witnessed a decline in interest from hedge fund managers, we can see that there was a specific group of money managers who sold off their entire stakes last quarter. It's worth mentioning that Noam Gottesman's GLG Partners sold off the largest investment of the 750 funds tracked by Insider Monkey, comprising close to $1.5 million in stock, and Renaissance Technologies was right behind this move, as the fund sold off about $0.6 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Banner Corporation (NASDAQ:BANR) but similarly valued. These stocks are The Bank of N.T. Butterfield & Son Limited (NYSE:NTB), Repare Therapeutics Inc. (NASDAQ:RPTX), Tronox Holdings Plc (NYSE:TROX), Enerpac Tool Group Corp. (NYSE:EPAC), Radware Ltd. (NASDAQ:RDWR), Plains GP Holdings LP (NYSE:PAGP), and Domo Inc. (NASDAQ:DOMO). This group of stocks' market values resemble BANR's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NTB,15,56385,0 RPTX,15,359949,-2 TROX,19,69798,-2 EPAC,11,83786,-7 RDWR,10,256298,-3 PAGP,18,74928,-1 DOMO,24,252079,3 Average,16,164746,-1.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $165 million. That figure was $42 million in BANR's case. Domo Inc. (NASDAQ:DOMO) is the most popular stock in this table. On the other hand Radware Ltd. (NASDAQ:RDWR) is the least popular one with only 10 bullish hedge fund positions. Banner Corporation (NASDAQ:BANR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BANR is 40.3. 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 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on BANR as the stock returned 42.7% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.