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With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was Flushing Financial Corporation (NASDAQ:FFIC).
Is FFIC a good stock to buy now? Flushing Financial Corporation (NASDAQ:FFIC) investors should pay attention to a decrease in hedge fund sentiment in recent months. Flushing Financial Corporation (NASDAQ:FFIC) was in 10 hedge funds' portfolios at the end of September. The all time high for this statistics is 13. Our calculations also showed that FFIC 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.
Israel Englander of Millennium Management
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. Now we're going to go over the fresh hedge fund action surrounding Flushing Financial Corporation (NASDAQ:FFIC).
Do Hedge Funds Think FFIC Is A Good Stock To Buy Now?
At third quarter's end, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of -9% from the second quarter of 2020. On the other hand, there were a total of 13 hedge funds with a bullish position in FFIC a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, GAMCO Investors, managed by Mario Gabelli, holds the biggest position in Flushing Financial Corporation (NASDAQ:FFIC). GAMCO Investors has a $11.4 million position in the stock, comprising 0.1% of its 13F portfolio. The second most bullish fund manager is Renaissance Technologies, holding a $6.3 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other members of the smart money that hold long positions comprise Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, Israel Englander's Millennium Management and D. E. Shaw's D E Shaw. In terms of the portfolio weights assigned to each position GAMCO Investors allocated the biggest weight to Flushing Financial Corporation (NASDAQ:FFIC), around 0.13% of its 13F portfolio. Winton Capital Management is also relatively very bullish on the stock, setting aside 0.01 percent of its 13F equity portfolio to FFIC.
Judging by the fact that Flushing Financial Corporation (NASDAQ:FFIC) has experienced declining sentiment from the aggregate hedge fund industry, logic holds that there is a sect of hedgies who sold off their full holdings last quarter. It's worth mentioning that Bruce Kovner's Caxton Associates LP sold off the biggest investment of the 750 funds monitored by Insider Monkey, valued at an estimated $0.3 million in stock, and Greg Eisner's Engineers Gate Manager was right behind this move, as the fund cut about $0.1 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 1 funds last quarter.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Flushing Financial Corporation (NASDAQ:FFIC) but similarly valued. These stocks are Motorcar Parts of America, Inc. (NASDAQ:MPAA), IMV Inc. (NASDAQ:IMV), Spark Energy, Inc. (NASDAQ:SPKE), Tufin Software Technologies Ltd. (NYSE:TUFN), Fossil Group Inc (NASDAQ:FOSL), Aspen Aerogels Inc (NYSE:ASPN), and Lydall, Inc. (NYSE:LDL). This group of stocks' market caps match FFIC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MPAA,8,53762,0 IMV,5,2308,4 SPKE,7,11538,0 TUFN,9,3630,4 FOSL,11,45755,2 ASPN,5,18039,-2 LDL,12,48365,0 Average,8.1,26200,1.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.1 hedge funds with bullish positions and the average amount invested in these stocks was $26 million. That figure was $26 million in FFIC's case. Lydall, Inc. (NYSE:LDL) is the most popular stock in this table. On the other hand IMV Inc. (NASDAQ:IMV) is the least popular one with only 5 bullish hedge fund positions. Flushing Financial Corporation (NASDAQ:FFIC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FFIC is 62.8. 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. Hedge funds were also right about betting on FFIC as the stock returned 53.7% since the end of Q3 (through 12/8) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.