Should I Buy Select Bancorp, Inc. (SLCT)?
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 866 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 March 31st. In this article we look at what those investors think of Select Bancorp, Inc. (NASDAQ:SLCT).
Select Bancorp, Inc. (NASDAQ:SLCT) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 5 hedge funds' portfolios at the end of March. Our calculations also showed that SLCT isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). At the end of this article we will also compare SLCT to other stocks including Five Star Senior Living Inc. (NYSE:FVE), American Resources Corporation (NASDAQ:AREC), and The Bank of Princeton (NASDAQ:BPRN) to get a better sense of its popularity.
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 115 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Anton Schutz of Mendon Capital Advisors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Now let's take a look at the new hedge fund action regarding Select Bancorp, Inc. (NASDAQ:SLCT).
Do Hedge Funds Think SLCT Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the fourth quarter of 2020. On the other hand, there were a total of 6 hedge funds with a bullish position in SLCT a year ago. With hedge funds' sentiment swirling, there exists an "upper tier" of key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
Among these funds, Mendon Capital Advisors held the most valuable stake in Select Bancorp, Inc. (NASDAQ:SLCT), which was worth $3.4 million at the end of the fourth quarter. On the second spot was Elizabeth Park Capital Management which amassed $3.3 million worth of shares. Fourthstone LLC, Renaissance Technologies, and Millennium Management 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 Mendon Capital Advisors allocated the biggest weight to Select Bancorp, Inc. (NASDAQ:SLCT), around 1.27% of its 13F portfolio. Fourthstone LLC is also relatively very bullish on the stock, dishing out 1.12 percent of its 13F equity portfolio to SLCT.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Seidman Investment Partnership. 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 Millennium Management).
Let's check out hedge fund activity in other stocks similar to Select Bancorp, Inc. (NASDAQ:SLCT). We will take a look at Five Star Senior Living Inc. (NYSE:FVE), American Resources Corporation (NASDAQ:AREC), The Bank of Princeton (NASDAQ:BPRN), Trecora Resources (NYSE:TREC), Second Sight Medical Products Inc (NASDAQ:EYES), Zynerba Pharmaceuticals Inc (NASDAQ:ZYNE), and Lazydays Holdings, Inc. (NASDAQ:LAZY). This group of stocks' market valuations are similar to SLCT's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FVE,11,27833,0 AREC,3,1966,2 BPRN,2,13793,0 TREC,6,24483,0 EYES,3,15582,2 ZYNE,6,3479,0 LAZY,10,33874,0 Average,5.9,17287,0.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.9 hedge funds with bullish positions and the average amount invested in these stocks was $17 million. That figure was $11 million in SLCT's case. Five Star Senior Living Inc. (NYSE:FVE) is the most popular stock in this table. On the other hand The Bank of Princeton (NASDAQ:BPRN) is the least popular one with only 2 bullish hedge fund positions. Select Bancorp, Inc. (NASDAQ:SLCT) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SLCT is 46.7. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.4% in 2021 through June 18th and still beat the market by 6.1 percentage points. A small number of hedge funds were also right about betting on SLCT as the stock returned 47.8% since the end of the first quarter (through 6/18) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
