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Should You Consider Investing in Signature Bank (SBNY)?

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Jose Karlo Mari Tottoc
·3 min read
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Alger, an investment management firm, published its “Alger Weatherbie Specialized Growth Fund” first quarter 2021 investor letter – a copy of which can be downloaded here. During the quarter, the largest portfolio sector weightings were Information Technology and Health Care. The largest sector overweight was Financials. Class A shares of the Alger Weatherbie Specialized Growth Fund underperformed the Russell 2500 Growth Index during the first quarter of 2021. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Alger Weatherbie Specialized Growth Fund, in their Q1 2021 investor letter, mentioned Signature Bank (NASDAQ: SBNY) and shared their insights on the company. Signature Bank is a New York-based full-service commercial bank that currently has a $13.1 billion market capitalization. Since the beginning of the year, SBNY delivered a 68.41% return, extending its 12-month gains to 159.85%. As of April 19, 2021, the stock closed at $227.84 per share.

Here is what Alger Weatherbie Specialized Growth Fund has to say about Signature Bank in their Q1 2021 investor letter:

"Signature Bank was among the top contributors to performance during the first quarter of 2021. Signature Bank provides business and personal banking products and services, including deposit products such as commercial checking accounts, money market accounts, escrow deposit accounts and cash concentration accounts. The company also offers loan products, including commercial and industrial loans, real estate loans and other loan types. Signature Bank has succeeded in applying its time-tested strategy of growing loans and deposits by expanding into new geographic areas and business lines. Signature Bank reported another very strong quarter, as deposits grew by nearly $9 billion sequentially in the fourth quarter. This represents annualized growth of approximately 66% in the quarter, and for the full year the bank grew deposits by approximately 57%."

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Our calculations show that Signature Bank (NASDAQ: SBNY) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Signature Bank was in 28 hedge fund portfolios, compared to 35 funds in the third quarter. SBNY delivered a 46.69% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

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 innovative stocks to buy 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 website:

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