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Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the third quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of First Financial Bankshares Inc (NASDAQ:FFIN) based on that data.
Is FFIN a good stock to buy now? First Financial Bankshares Inc (NASDAQ:FFIN) has experienced a decrease in enthusiasm from smart money recently. First Financial Bankshares Inc (NASDAQ:FFIN) was in 17 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistic is 18. There were 18 hedge funds in our database with FFIN holdings at the end of June. Our calculations also showed that FFIN 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.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Noam Gottesman of GLG Partners
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. With all of this in mind let's take a glance at the fresh hedge fund action surrounding First Financial Bankshares Inc (NASDAQ:FFIN).
Do Hedge Funds Think FFIN Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of -6% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards FFIN over the last 21 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in First Financial Bankshares Inc (NASDAQ:FFIN) was held by GLG Partners, which reported holding $8.8 million worth of stock at the end of September. It was followed by Millennium Management with a $4.1 million position. Other investors bullish on the company included Royce & Associates, PDT Partners, and Holocene Advisors. In terms of the portfolio weights assigned to each position PDT Partners allocated the biggest weight to First Financial Bankshares Inc (NASDAQ:FFIN), around 0.16% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, designating 0.04 percent of its 13F equity portfolio to FFIN.
Seeing as First Financial Bankshares Inc (NASDAQ:FFIN) has faced declining sentiment from the aggregate hedge fund industry, it's safe to say that there were a few hedge funds that elected to cut their full holdings last quarter. At the top of the heap, Jonathan Soros's JS Capital cut the biggest position of all the hedgies followed by Insider Monkey, valued at close to $0.7 million in stock. D. E. Shaw's fund, D E Shaw, also said goodbye to its stock, about $0.3 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 1 funds last quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as First Financial Bankshares Inc (NASDAQ:FFIN) but similarly valued. These stocks are Envista Holdings Corporation (NYSE:NVST), Nextera Energy Partners LP (NYSE:NEP), Graphic Packaging Holding Company (NYSE:GPK), NovaGold Resources Inc. (NYSE:NG), Lattice Semiconductor Corporation (NASDAQ:LSCC), TFI International Inc. (NYSE:TFII), and Gildan Activewear Inc (NYSE:GIL). This group of stocks' market values resemble FFIN's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NVST,20,417907,-1 NEP,22,217720,1 GPK,30,311941,-2 NG,19,466079,-4 LSCC,24,135268,5 TFII,13,116787,3 GIL,18,522441,-4 Average,20.9,312592,-0.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.9 hedge funds with bullish positions and the average amount invested in these stocks was $313 million. That figure was $27 million in FFIN's case. Graphic Packaging Holding Company (NYSE:GPK) is the most popular stock in this table. On the other hand TFI International Inc. (NYSE:TFII) is the least popular one with only 13 bullish hedge fund positions. First Financial Bankshares Inc (NASDAQ:FFIN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for FFIN is 44.1. 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 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on FFIN as the stock returned 26.8% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.