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The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards First Busey Corporation (NASDAQ:BUSE).
First Busey Corporation (NASDAQ:BUSE) investors should be aware of an increase in hedge fund interest of late. BUSE was in 14 hedge funds' portfolios at the end of the third quarter of 2018. There were 13 hedge funds in our database with BUSE holdings at the end of the previous quarter. Our calculations also showed that BUSE isn't among the 30 most popular stocks among hedge funds.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren't comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
We're going to take a look at the new hedge fund action regarding First Busey Corporation (NASDAQ:BUSE).
Hedge fund activity in First Busey Corporation (NASDAQ:BUSE)
Heading into the fourth quarter of 2018, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of 8% from one quarter earlier. By comparison, 12 hedge funds held shares or bullish call options in BUSE heading into this year. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Renaissance Technologies held the most valuable stake in First Busey Corporation (NASDAQ:BUSE), which was worth $27.9 million at the end of the third quarter. On the second spot was Millennium Management which amassed $7.1 million worth of shares. Moreover, Citadel Investment Group, Basswood Capital, and AQR Capital Management were also bullish on First Busey Corporation (NASDAQ:BUSE), allocating a large percentage of their portfolios to this stock.
As industrywide interest jumped, key money managers have jumped into First Busey Corporation (NASDAQ:BUSE) headfirst. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, created the biggest position in First Busey Corporation (NASDAQ:BUSE). Arrowstreet Capital had $0.7 million invested in the company at the end of the quarter. Matthew Tewksbury's Stevens Capital Management also initiated a $0.4 million position during the quarter. The only other fund with a brand new BUSE position is Brandon Haley's Holocene Advisors.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as First Busey Corporation (NASDAQ:BUSE) but similarly valued. We will take a look at Mirati Therapeutics, Inc. (NASDAQ:MRTX), Royce Value Trust, Inc. (NYSE:RVT), S & T Bancorp Inc (NASDAQ:STBA), and Biohaven Pharmaceutical Holding Company Ltd. (NYSE:BHVN). This group of stocks' market valuations match BUSE's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MRTX,24,661199,5 RVT,2,13939,-1 STBA,6,3591,-1 BHVN,18,198625,3 Average,12.5,219339,1.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.5 hedge funds with bullish positions and the average amount invested in these stocks was $219 million. That figure was $53 million in BUSE's case. Mirati Therapeutics, Inc. (NASDAQ:MRTX) is the most popular stock in this table. On the other hand Royce Value Trust, Inc. (NYSE:RVT) is the least popular one with only 2 bullish hedge fund positions. First Busey Corporation (NASDAQ:BUSE) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. In this regard MRTX might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
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