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After several tireless days we have finished crunching the numbers from nearly 817 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards BayCom Corp (NASDAQ:BCML).
Is BayCom Corp (NASDAQ:BCML) a bargain? Investors who are in the know were in a bearish mood. The number of bullish hedge fund bets shrunk by 3 lately. BayCom Corp (NASDAQ:BCML) was in 3 hedge funds' portfolios at the end of September. The all time high for this statistics is 6. Our calculations also showed that BCML 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 the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Emanuel Friedman of EJF 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 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 take a glance at the latest hedge fund action regarding BayCom Corp (NASDAQ:BCML).
How have hedgies been trading BayCom Corp (NASDAQ:BCML)?
At Q3's end, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of -50% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards BCML over the last 21 quarters. With hedge funds' capital changing hands, there exists a few notable hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
The largest stake in BayCom Corp (NASDAQ:BCML) was held by EJF Capital, which reported holding $6.7 million worth of stock at the end of September. It was followed by Royce & Associates with a $2.6 million position. The only other hedge fund that is bullish on the company was Renaissance Technologies.
Judging by the fact that BayCom Corp (NASDAQ:BCML) has experienced declining sentiment from the entirety of the hedge funds we track, we can see that there lies a certain "tier" of funds that decided to sell off their entire stakes in the third quarter. Interestingly, John Overdeck and David Siegel's Two Sigma Advisors said goodbye to the largest stake of the 750 funds tracked by Insider Monkey, worth close to $0.3 million in stock. Ken Griffin's fund, Citadel Investment Group, also said goodbye to its stock, about $0.3 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 3 funds in the third quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as BayCom Corp (NASDAQ:BCML) but similarly valued. We will take a look at Oxford Square Capital Corp. (NASDAQ:OXSQ), Cidara Therapeutics Inc (NASDAQ:CDTX), Intellicheck Inc. (NASDAQ:IDN), Security National Financial Corp. (NASDAQ:SNFCA), First Business Financial Services Inc (NASDAQ:FBIZ), First Bank (NASDAQ:FRBA), and The Eastern Company (NASDAQ:EML). This group of stocks' market caps match BCML's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position OXSQ,3,2094,1 CDTX,8,22230,2 IDN,1,226,-3 SNFCA,2,1583,0 FBIZ,2,3630,-2 FRBA,6,3211,0 EML,5,33660,0 Average,3.9,9519,-0.3 [/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 $10 million. That figure was $9 million in BCML's case. Cidara Therapeutics Inc (NASDAQ:CDTX) is the most popular stock in this table. On the other hand Intellicheck Inc. (NASDAQ:IDN) is the least popular one with only 1 bullish hedge fund positions. BayCom Corp (NASDAQ:BCML) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BCML is 31.3. 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 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 BCML as the stock returned 45.7% since the end of the third quarter (through 11/23) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.