We are still in an overall bull market and many stocks that smart money investors were piling into surged through the end of November. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 54% and 51% respectively. Hedge funds' top 3 stock picks returned 41.7% this year and beat the S&P 500 ETFs by 14 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That's why we believe it isn't a waste of time to check out hedge fund sentiment before you invest in a stock like Bridge Bancorp, Inc. (NASDAQ:BDGE).
Hedge fund interest in Bridge Bancorp, Inc. (NASDAQ:BDGE) shares was flat at the end of last quarter. This is usually a negative indicator. 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 Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT), OneSpan Inc. (NASDAQ:OSPN), and Renewable Energy Group Inc (NASDAQ:REGI) to gather more data points. Our calculations also showed that BDGE isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are many tools shareholders employ to assess stocks. A couple of the best tools are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the best picks of the best hedge fund managers can outpace the broader indices by a healthy amount (see the details here).
[caption id="attachment_735636" align="alignnone" width="1613"] Matthew Lindenbaum of Basswood Capital[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world's largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds' buy/sell signals. We're going to go over the recent hedge fund action surrounding Bridge Bancorp, Inc. (NASDAQ:BDGE).
How are hedge funds trading Bridge Bancorp, Inc. (NASDAQ:BDGE)?
Heading into the fourth quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 11 hedge funds with a bullish position in BDGE a year ago. With the smart money's positions undergoing their usual ebb and flow, there exists an "upper tier" of noteworthy hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Basswood Capital, managed by Matthew Lindenbaum, holds the most valuable position in Bridge Bancorp, Inc. (NASDAQ:BDGE). Basswood Capital has a $64.8 million position in the stock, comprising 4.7% of its 13F portfolio. The second largest stake is held by Ulysses Management, led by Joshua Nash, holding a $11.2 million position; the fund has 1% of its 13F portfolio invested in the stock. Some other members of the smart money that hold long positions consist of Renaissance Technologies, Paul Magidson, Jonathan Cohen. And Ostrom Enders's Castine Capital Management and Emanuel J. Friedman's EJF Capital. In terms of the portfolio weights assigned to each position Basswood Capital allocated the biggest weight to Bridge Bancorp, Inc. (NASDAQ:BDGE), around 4.74% of its 13F portfolio. Castine Capital Management is also relatively very bullish on the stock, dishing out 1.31 percent of its 13F equity portfolio to BDGE.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Gillson Capital. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Winton Capital Management).
Let's now review hedge fund activity in other stocks similar to Bridge Bancorp, Inc. (NASDAQ:BDGE). These stocks are Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT), OneSpan Inc. (NASDAQ:OSPN), Renewable Energy Group Inc (NASDAQ:REGI), and Hersha Hospitality Trust (NYSE:HT). This group of stocks' market valuations are closest to BDGE's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RCKT,13,137987,-1 OSPN,10,70375,0 REGI,16,89440,-1 HT,13,17504,1 Average,13,78827,-0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $79 million. That figure was $95 million in BDGE's case. Renewable Energy Group Inc (NASDAQ:REGI) is the most popular stock in this table. On the other hand OneSpan Inc. (NASDAQ:OSPN) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Bridge Bancorp, Inc. (NASDAQ:BDGE) is even less popular than OSPN. Hedge funds clearly dropped the ball on BDGE as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on BDGE as the stock returned 11.4% during the fourth quarter (through the end of November) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.