In this article we will take a look at whether hedge funds think Northfield Bancorp Inc (NASDAQ:NFBK) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is Northfield Bancorp Inc (NASDAQ:NFBK) a safe investment now? Prominent investors are taking a bullish view. The number of long hedge fund bets advanced by 1 lately. Our calculations also showed that NFBK isn't among the 30 most popular stocks among hedge funds (click for Q1 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 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 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.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let's take a peek at the latest hedge fund action regarding Northfield Bancorp Inc (NASDAQ:NFBK).
What does smart money think about Northfield Bancorp Inc (NASDAQ:NFBK)?
At Q1's end, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from the fourth quarter of 2019. On the other hand, there were a total of 5 hedge funds with a bullish position in NFBK a year ago. With hedgies' sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, holds the biggest position in Northfield Bancorp Inc (NASDAQ:NFBK). Renaissance Technologies has a $27.5 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by David Harding of Winton Capital Management, with a $0.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other members of the smart money that hold long positions include Ken Griffin's Citadel Investment Group, John Overdeck and David Siegel's Two Sigma Advisors and Paul Tudor Jones's Tudor Investment Corp. In terms of the portfolio weights assigned to each position Renaissance Technologies allocated the biggest weight to Northfield Bancorp Inc (NASDAQ:NFBK), around 0.03% of its 13F portfolio. Tudor Investment Corp is also relatively very bullish on the stock, setting aside 0.01 percent of its 13F equity portfolio to NFBK.
Now, some big names were breaking ground themselves. Citadel Investment Group, managed by Ken Griffin, established the largest position in Northfield Bancorp Inc (NASDAQ:NFBK). Citadel Investment Group had $0.4 million invested in the company at the end of the quarter. Paul Tudor Jones's Tudor Investment Corp also initiated a $0.2 million position during the quarter.
Let's go over hedge fund activity in other stocks similar to Northfield Bancorp Inc (NASDAQ:NFBK). These stocks are Harsco Corporation (NYSE:HSC), Forrester Research, Inc. (NASDAQ:FORR), BrightSphere Investment Group plc (NYSE:BSIG), and Usa Compression Partners LP (NYSE:USAC). This group of stocks' market values are closest to NFBK's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position HSC,16,64647,-5 FORR,8,55803,-2 BSIG,20,185201,-6 USAC,5,7663,-3 Average,12.25,78329,-4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.25 hedge funds with bullish positions and the average amount invested in these stocks was $78 million. That figure was $29 million in NFBK's case. BrightSphere Investment Group plc (NYSE:BSIG) is the most popular stock in this table. On the other hand Usa Compression Partners LP (NYSE:USAC) is the least popular one with only 5 bullish hedge fund positions. Northfield Bancorp Inc (NASDAQ:NFBK) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th and surpassed the market by 14.2 percentage points. Unfortunately NFBK wasn't nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); NFBK investors were disappointed as the stock returned 4.1% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.