The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. What do these smart investors think about First Bancorp (NYSE:FBP)?
First Bancorp (NYSE:FBP) has seen a decrease in hedge fund sentiment of late. FBP was in 24 hedge funds' portfolios at the end of the first quarter of 2020. There were 32 hedge funds in our database with FBP positions at the end of the previous quarter. Our calculations also showed that FBP 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.
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 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 S&P 500 ETFs by 58 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 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.
[caption id="attachment_255014" align="aligncenter" width="400"] Clint Carlson of Carlson Capital[/caption]
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. 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. Now let's review the latest hedge fund action encompassing First Bancorp (NYSE:FBP).
How are hedge funds trading First Bancorp (NYSE:FBP)?
At Q1's end, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -25% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in FBP over the last 18 quarters. With hedgies' sentiment swirling, there exists a select group of notable hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
Among these funds, Point72 Asset Management held the most valuable stake in First Bancorp (NYSE:FBP), which was worth $35.4 million at the end of the third quarter. On the second spot was Alyeska Investment Group which amassed $20.1 million worth of shares. EJF Capital, Millennium Management, and D E Shaw were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position EJF Capital allocated the biggest weight to First Bancorp (NYSE:FBP), around 3.76% of its 13F portfolio. Algert Coldiron Investors is also relatively very bullish on the stock, dishing out 0.56 percent of its 13F equity portfolio to FBP.
Because First Bancorp (NYSE:FBP) has witnessed a decline in interest from the smart money, it's safe to say that there is a sect of hedgies that slashed their full holdings in the first quarter. Interestingly, Jeffrey Hinkle's Shoals Capital Management dumped the largest investment of all the hedgies tracked by Insider Monkey, comprising about $7.9 million in stock, and Michael Gelband's ExodusPoint Capital was right behind this move, as the fund said goodbye to about $1.4 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 8 funds in the first quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as First Bancorp (NYSE:FBP) but similarly valued. We will take a look at Verra Mobility Corporation (NASDAQ:VRRM), BrightView Holdings, Inc. (NYSE:BV), Rush Enterprises, Inc. (NASDAQ:RUSHA), and Mobile Mini Inc (NASDAQ:MINI). This group of stocks' market caps match FBP's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VRRM,23,105855,-10 BV,8,160603,-1 RUSHA,17,43687,-7 MINI,18,58994,-6 Average,16.5,92285,-6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.5 hedge funds with bullish positions and the average amount invested in these stocks was $92 million. That figure was $133 million in FBP's case. Verra Mobility Corporation (NASDAQ:VRRM) is the most popular stock in this table. On the other hand BrightView Holdings, Inc. (NYSE:BV) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks First Bancorp (NYSE:FBP) is more popular among hedge funds. 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 still beat the market by 14.2 percentage points. Unfortunately FBP wasn't nearly as popular as these 10 stocks and hedge funds that were betting on FBP were disappointed as the stock returned 14.5% during the second quarter (through June 10th) 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.