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Hedge Fund Sentiment Is Stagnant On FIRST FINANCIAL NORTHWEST, INC. (FFNW)

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The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on March 31st. We at Insider Monkey have made an extensive database of more than 866 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded FIRST FINANCIAL NORTHWEST, INC. (NASDAQ:FFNW) based on those filings.

Hedge fund interest in FIRST FINANCIAL NORTHWEST, INC. (NASDAQ:FFNW) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that FFNW isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). At the end of this article we will also compare FFNW to other stocks including Aytu Biopharma, Inc. (NASDAQ:AYTU), BioSig Technologies, Inc. (NASDAQ:BSGM), and Peoples Bancorp of North Carolina, Inc. (NASDAQ:PEBK) to get a better sense of its popularity.

If you'd ask most market participants, hedge funds are seen as unimportant, outdated financial vehicles of years past. While there are greater than 8000 funds with their doors open at the moment, Our researchers hone in on the aristocrats of this group, around 850 funds. These investment experts have their hands on bulk of all hedge funds' total capital, and by paying attention to their inimitable stock picks, Insider Monkey has figured out several investment strategies that have historically exceeded the S&P 500 index. Insider Monkey's flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Arbiter Partners Capital Management's Returns, AUM and Holdings
Arbiter Partners Capital Management's Returns, AUM and Holdings

Paul Isaac of Arbiter Partners Capital Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $29 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks 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 homepage. Now let's take a gander at the new hedge fund action regarding FIRST FINANCIAL NORTHWEST, INC. (NASDAQ:FFNW).

Do Hedge Funds Think FFNW Is A Good Stock To Buy Now?

At first quarter's end, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the fourth quarter of 2020. By comparison, 1 hedge funds held shares or bullish call options in FFNW 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.

According to Insider Monkey's hedge fund database, Renaissance Technologies has the largest position in FIRST FINANCIAL NORTHWEST, INC. (NASDAQ:FFNW), worth close to $9.6 million, corresponding to less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Paul J. Isaac of Arbiter Partners Capital Management, with a $0.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining professional money managers that hold long positions encompass Israel Englander's Millennium Management, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital and . In terms of the portfolio weights assigned to each position Arbiter Partners Capital Management allocated the biggest weight to FIRST FINANCIAL NORTHWEST, INC. (NASDAQ:FFNW), around 0.05% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, setting aside 0.01 percent of its 13F equity portfolio to FFNW.

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Fourthstone LLC. 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 Arrowstreet Capital).

Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as FIRST FINANCIAL NORTHWEST, INC. (NASDAQ:FFNW) but similarly valued. These stocks are Aytu Biopharma, Inc. (NASDAQ:AYTU), BioSig Technologies, Inc. (NASDAQ:BSGM), Peoples Bancorp of North Carolina, Inc. (NASDAQ:PEBK), PFSweb, Inc. (NASDAQ:PFSW), Brainstorm Cell Therapeutics Inc. (NASDAQ:BCLI), Auburn National Bancorporation, Inc. (NASDAQ:AUBN), and Franklin Financial Services Corporation (NASDAQ:FRAF). This group of stocks' market valuations are closest to FFNW's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AYTU,7,14594,3 BSGM,3,273,2 PEBK,2,6890,0 PFSW,6,19733,-1 BCLI,5,2305,-2 AUBN,1,585,0 FRAF,2,1474,2 Average,3.7,6551,0.6 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 3.7 hedge funds with bullish positions and the average amount invested in these stocks was $7 million. That figure was $11 million in FFNW's case. Aytu Biopharma, Inc. (NASDAQ:AYTU) is the most popular stock in this table. On the other hand Auburn National Bancorporation, Inc. (NASDAQ:AUBN) is the least popular one with only 1 bullish hedge fund positions. FIRST FINANCIAL NORTHWEST, INC. (NASDAQ:FFNW) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FFNW is 47.1. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and beat the market again by 3.3 percentage points. Unfortunately FFNW wasn't nearly as popular as these 5 stocks and hedge funds that were betting on FFNW were disappointed as the stock returned 2.5% since the end of March (through 6/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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

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