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Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of First United Corp (NASDAQ:FUNC).
Hedge fund interest in First United Corp (NASDAQ:FUNC) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that FUNC 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). The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Boxlight Corporation (NASDAQ:BOXL), Ur-Energy Inc. (NYSE:URG), and Beam Global (NASDAQ:BEEM) to gather more data points.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most traders, hedge funds are perceived as underperforming, old investment vehicles of the past. While there are greater than 8000 funds in operation at the moment, Our researchers choose to focus on the upper echelon of this group, about 850 funds. These investment experts direct most of the smart money's total capital, and by observing their inimitable investments, Insider Monkey has revealed a number of investment strategies that have historically outstripped Mr. Market. Insider Monkey's flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
Jeffrey Gendell of Tontine Asset Management
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. With all of this in mind we're going to take a gander at the recent hedge fund action encompassing First United Corp (NASDAQ:FUNC).
How have hedgies been trading First United Corp (NASDAQ:FUNC)?
Heading into the fourth quarter of 2020, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 7 hedge funds with a bullish position in FUNC a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Tontine Asset Management, managed by Jeffrey Gendell, holds the number one position in First United Corp (NASDAQ:FUNC). Tontine Asset Management has a $1.5 million position in the stock, comprising 0.3% of its 13F portfolio. On Tontine Asset Management's heels is Renaissance Technologies, with a $1.3 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other professional money managers with similar optimism contain Lawrence Seidman's Seidman Investment Partnership, David Harding's Winton Capital Management and . In terms of the portfolio weights assigned to each position Seidman Investment Partnership allocated the biggest weight to First United Corp (NASDAQ:FUNC), around 0.69% of its 13F portfolio. Tontine Asset Management is also relatively very bullish on the stock, designating 0.31 percent of its 13F equity portfolio to FUNC.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren't any hedge funds dumping their holdings during the third quarter, there weren't any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven't identified any viable catalysts that can attract investor attention.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as First United Corp (NASDAQ:FUNC) but similarly valued. We will take a look at Boxlight Corporation (NASDAQ:BOXL), Ur-Energy Inc. (NYSE:URG), Beam Global (NASDAQ:BEEM), The Alkaline Water Company Inc. (NASDAQ:WTER), Enlivex Therapeutics Ltd. (NASDAQ:ENLV), Corenergy Infrastructure Trust Inc (NYSE:CORR), and DiaMedica Therapeutics Inc. (NASDAQ:DMAC). This group of stocks' market caps are closest to FUNC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BOXL,1,1285,0 URG,3,2681,1 BEEM,5,8317,2 WTER,3,2527,1 ENLV,1,1773,-2 CORR,6,6885,-3 DMAC,10,22656,4 Average,4.1,6589,0.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 4.1 hedge funds with bullish positions and the average amount invested in these stocks was $7 million. That figure was $4 million in FUNC's case. DiaMedica Therapeutics Inc. (NASDAQ:DMAC) is the most popular stock in this table. On the other hand Boxlight Corporation (NASDAQ:BOXL) is the least popular one with only 1 bullish hedge fund positions. First United Corp (NASDAQ:FUNC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for FUNC is 36.7. 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 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on FUNC as the stock returned 35.4% since the end of the third quarter (through 11/27) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.