Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 750 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds' 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Sandy Spring Bancorp Inc. (NASDAQ:SASR) in this article.
Sandy Spring Bancorp Inc. (NASDAQ:SASR) was in 16 hedge funds' portfolios at the end of the third quarter of 2019. SASR shareholders have witnessed an increase in hedge fund sentiment lately. There were 15 hedge funds in our database with SASR holdings at the end of the previous quarter. Our calculations also showed that SASR isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to 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 flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 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.
[caption id="attachment_26073" align="alignnone" width="600"] Jim Simons of Renaissance Technologies[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world's largest cannabis market, so we check out this European marijuana stock pitch. 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 also rely on the best performing hedge funds' buy/sell signals. We're going to take a look at the key hedge fund action encompassing Sandy Spring Bancorp Inc. (NASDAQ:SASR).
Hedge fund activity in Sandy Spring Bancorp Inc. (NASDAQ:SASR)
Heading into the fourth quarter of 2019, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 7% from one quarter earlier. By comparison, 12 hedge funds held shares or bullish call options in SASR a year ago. 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 Insider Monkey's hedge fund database, Renaissance Technologies has the most valuable position in Sandy Spring Bancorp Inc. (NASDAQ:SASR), worth close to $35.7 million, comprising less than 0.1%% of its total 13F portfolio. The second largest stake is held by Forest Hill Capital, led by Mark Lee, holding a $12.3 million position; the fund has 4.3% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that are bullish consist of Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, Israel Englander's Millennium Management and Ken Griffin's Citadel Investment Group. In terms of the portfolio weights assigned to each position Forest Hill Capital allocated the biggest weight to Sandy Spring Bancorp Inc. (NASDAQ:SASR), around 4.33% of its 13F portfolio. Algert Coldiron Investors is also relatively very bullish on the stock, designating 0.32 percent of its 13F equity portfolio to SASR.
As one would reasonably expect, specific money managers were breaking ground themselves. Winton Capital Management, managed by David Harding, created the most valuable position in Sandy Spring Bancorp Inc. (NASDAQ:SASR). Winton Capital Management had $1.4 million invested in the company at the end of the quarter. Michael Gelband's ExodusPoint Capital also initiated a $0.5 million position during the quarter. The only other fund with a new position in the stock is Minhua Zhang's Weld Capital Management.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Sandy Spring Bancorp Inc. (NASDAQ:SASR) but similarly valued. These stocks are Sleep Number Corporation (NASDAQ:SNBR), Arch Coal, Inc. (NYSE:ARCH), MSG Networks Inc (NYSE:MSGN), and Bright Scholar Education Holdings Limited (NYSE:BEDU). This group of stocks' market values resemble SASR's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SNBR,16,164083,0 ARCH,26,298997,-1 MSGN,31,267648,8 BEDU,9,116217,0 Average,20.5,211736,1.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.5 hedge funds with bullish positions and the average amount invested in these stocks was $212 million. That figure was $87 million in SASR's case. MSG Networks Inc (NYSE:MSGN) is the most popular stock in this table. On the other hand Bright Scholar Education Holdings Limited (NYSE:BEDU) is the least popular one with only 9 bullish hedge fund positions. Sandy Spring Bancorp Inc. (NASDAQ:SASR) 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 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately SASR wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); SASR investors were disappointed as the stock returned 5.8% during the first two months of the fourth 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 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.