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 866 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 Bank of Commerce Holdings (NASDAQ:BOCH)?
Is Bank of Commerce Holdings (NASDAQ:BOCH) a buy, sell, or hold? The best stock pickers were in a bearish mood. The number of bullish hedge fund positions went down by 1 in recent months. Bank of Commerce Holdings (NASDAQ:BOCH) was in 3 hedge funds' portfolios at the end of March. The all time high for this statistic is 7. Our calculations also showed that BOCH isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 4 hedge funds in our database with BOCH positions at the end of the fourth quarter.
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 S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Emanuel Friedman of EJF Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $26 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. Keeping this in mind we're going to view the key hedge fund action encompassing Bank of Commerce Holdings (NASDAQ:BOCH).
Do Hedge Funds Think BOCH Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -25% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards BOCH over the last 23 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, EJF Capital, managed by Emanuel J. Friedman, holds the number one position in Bank of Commerce Holdings (NASDAQ:BOCH). EJF Capital has a $3.8 million position in the stock, comprising 0.3% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, which holds a $1.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. In terms of the portfolio weights assigned to each position EJF Capital allocated the biggest weight to Bank of Commerce Holdings (NASDAQ:BOCH), around 0.28% of its 13F portfolio. Bailard Inc is also relatively very bullish on the stock, earmarking 0.01 percent of its 13F equity portfolio to BOCH.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Winton 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 none of the 750+ hedge funds tracked by Insider Monkey identified BOCH as a viable investment and initiated a position in the stock.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Bank of Commerce Holdings (NASDAQ:BOCH) but similarly valued. These stocks are Investar Holding Corporation (NASDAQ:ISTR), TELA Bio, Inc. (NASDAQ:TELA), Kaixin Auto Holdings (NASDAQ:KXIN), First Business Financial Services Inc (NASDAQ:FBIZ), Monroe Capital Corp (NASDAQ:MRCC), Matinas Biopharma Holdings, Inc. (NYSE:MTNB), and Orion Energy Systems, Inc. (NASDAQ:OESX). This group of stocks' market caps resemble BOCH's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ISTR,5,20928,0 TELA,9,70631,1 KXIN,5,490,0 FBIZ,3,6057,1 MRCC,3,2470,-2 MTNB,8,1763,-1 OESX,10,17546,1 Average,6.1,17126,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.1 hedge funds with bullish positions and the average amount invested in these stocks was $17 million. That figure was $6 million in BOCH's case. Orion Energy Systems, Inc. (NASDAQ:OESX) is the most popular stock in this table. On the other hand First Business Financial Services Inc (NASDAQ:FBIZ) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Bank of Commerce Holdings (NASDAQ:BOCH) is even less popular than FBIZ. Our overall hedge fund sentiment score for BOCH is 16.9. 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. Hedge funds clearly dropped the ball on BOCH as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. 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 still beat the market by 3.3 percentage points. A small number of hedge funds were also right about betting on BOCH as the stock returned 14.8% since Q1 (through June 11th) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.