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. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider Home Bancorp, Inc. (NASDAQ:HBCP) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
Is Home Bancorp, Inc. (NASDAQ:HBCP) the right investment to pursue these days? Investors who are in the know are taking a bullish view. The number of long hedge fund positions rose by 3 recently. Our calculations also showed that HBCP isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). HBCP was in 5 hedge funds' portfolios at the end of the third quarter of 2019. There were 2 hedge funds in our database with HBCP positions at the end of the previous quarter. Video: Click the image to 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' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.8% through November 21, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_189632" align="aligncenter" width="450"] David Harding of Winton Capital Management[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius' weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager's investor letter and the stock already gained 20 percent. Keeping this in mind we're going to take a glance at the recent hedge fund action encompassing Home Bancorp, Inc. (NASDAQ:HBCP).
Hedge fund activity in Home Bancorp, Inc. (NASDAQ:HBCP)
At the end of the third quarter, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of 150% from the second quarter of 2019. By comparison, 3 hedge funds held shares or bullish call options in HBCP a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Home Bancorp, Inc. (NASDAQ:HBCP) was held by Renaissance Technologies, which reported holding $9.4 million worth of stock at the end of September. It was followed by Winton Capital Management with a $0.8 million position. Other investors bullish on the company included Two Sigma Advisors, Zebra Capital Management, and Royce & Associates. In terms of the portfolio weights assigned to each position Zebra Capital Management allocated the biggest weight to Home Bancorp, Inc. (NASDAQ:HBCP), around 0.22% of its 13F portfolio. Winton Capital Management is also relatively very bullish on the stock, earmarking 0.01 percent of its 13F equity portfolio to HBCP.
With a general bullishness amongst the heavyweights, some big names were leading the bulls' herd. Winton Capital Management, managed by David Harding, established the most outsized position in Home Bancorp, Inc. (NASDAQ:HBCP). Winton Capital Management had $0.8 million invested in the company at the end of the quarter. John Overdeck and David Siegel's Two Sigma Advisors also made a $0.2 million investment in the stock during the quarter. The only other fund with a brand new HBCP position is Roger Ibbotson's Zebra Capital Management.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Home Bancorp, Inc. (NASDAQ:HBCP) but similarly valued. These stocks are ObsEva SA (NASDAQ:OBSV), Lands' End, Inc. (NASDAQ:LE), McDermott International, Inc. (NYSE:MDR), and Owens & Minor, Inc. (NYSE:OMI). This group of stocks' market valuations are similar to HBCP's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position OBSV,8,49359,0 LE,12,69409,0 MDR,19,52301,-3 OMI,16,38684,3 Average,13.75,52438,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $52 million. That figure was $11 million in HBCP's case. McDermott International, Inc. (NYSE:MDR) is the most popular stock in this table. On the other hand ObsEva SA (NASDAQ:OBSV) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Home Bancorp, Inc. (NASDAQ:HBCP) is even less popular than OBSV. Hedge funds dodged a bullet by taking a bearish stance towards HBCP. Our calculations showed that the top 20 most popular hedge fund stocks returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately HBCP wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); HBCP investors were disappointed as the stock returned -0.5% during the fourth quarter (through the end of November) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market so far in Q4.
Disclosure: None. This article was originally published at Insider Monkey.