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A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on First Mid Bancshares, Inc. (NASDAQ:FMBH).
First Mid Bancshares, Inc. (NASDAQ:FMBH) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 3 hedge funds' portfolios at the end of the third quarter of 2020. Our calculations also showed that FMBH 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). At the end of this article we will also compare FMBH to other stocks including American Public Education, Inc. (NASDAQ:APEI), Consolidated Communications Holdings Inc (NASDAQ:CNSL), and ChannelAdvisor Corp (NYSE:ECOM) to get a better sense of its popularity.
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.
Phil Stone of Fourthstone LLC
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 10 most profitable companies in the world 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 let's review the latest hedge fund action surrounding First Mid Bancshares, Inc. (NASDAQ:FMBH).
What have hedge funds been doing with First Mid Bancshares, Inc. (NASDAQ:FMBH)?
At the end of the third quarter, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the second quarter of 2020. On the other hand, there were a total of 5 hedge funds with a bullish position in FMBH a year ago. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in First Mid Bancshares, Inc. (NASDAQ:FMBH) was held by Renaissance Technologies, which reported holding $1.6 million worth of stock at the end of September. It was followed by Winton Capital Management with a $0.9 million position. The only other hedge fund that is bullish on the company was Fourthstone LLC.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Zebra Capital Management. 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 Fourthstone LLC).
Let's now take a look at hedge fund activity in other stocks similar to First Mid Bancshares, Inc. (NASDAQ:FMBH). These stocks are American Public Education, Inc. (NASDAQ:APEI), Consolidated Communications Holdings Inc (NASDAQ:CNSL), ChannelAdvisor Corp (NYSE:ECOM), SP Plus Corp (NASDAQ:SP), Enerplus Corp (NYSE:ERF), The Children's Place Inc. (NASDAQ:PLCE), and Tekla Life Sciences Investors (NYSE:HQL). This group of stocks' market valuations are similar to FMBH's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position APEI,12,75333,-4 CNSL,15,24192,3 ECOM,19,62827,0 SP,13,23906,-2 ERF,17,77008,1 PLCE,16,84447,-7 HQL,2,1362,0 Average,13.4,49868,-1.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.4 hedge funds with bullish positions and the average amount invested in these stocks was $50 million. That figure was $3 million in FMBH's case. ChannelAdvisor Corp (NYSE:ECOM) is the most popular stock in this table. On the other hand Tekla Life Sciences Investors (NYSE:HQL) is the least popular one with only 2 bullish hedge fund positions. First Mid Bancshares, Inc. (NASDAQ:FMBH) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for FMBH is 22.9. 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 28.1% in 2020 through November 23rd and still beat the market by 15.4 percentage points. A small number of hedge funds were also right about betting on FMBH as the stock returned 22% since the end of the third quarter (through 11/23) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.