We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of Parke Bancorp, Inc. (NASDAQ:PKBK) based on that data.
Parke Bancorp, Inc. (NASDAQ:PKBK) has experienced an increase in hedge fund interest lately. PKBK was in 4 hedge funds' portfolios at the end of the first quarter of 2020. There were 3 hedge funds in our database with PKBK holdings at the end of the previous quarter. Our calculations also showed that PKBK 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 51 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'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_735636" align="aligncenter" width="394"] Matthew Lindenbaum of Basswood Capital[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020's unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. 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 take a peek at the key hedge fund action surrounding Parke Bancorp, Inc. (NASDAQ:PKBK).
What have hedge funds been doing with Parke Bancorp, Inc. (NASDAQ:PKBK)?
At the end of the first quarter, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from the previous quarter. The graph below displays the number of hedge funds with bullish position in PKBK over the last 18 quarters. So, let's find out 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, Matthew Lindenbaum's Basswood Capital has the number one position in Parke Bancorp, Inc. (NASDAQ:PKBK), worth close to $7.3 million, accounting for 0.9% of its total 13F portfolio. The second most bullish fund manager is Renaissance Technologies, which holds a $2.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining members of the smart money that hold long positions comprise Ken Griffin's Citadel Investment Group, Chuck Royce's Royce & Associates and . In terms of the portfolio weights assigned to each position Basswood Capital allocated the biggest weight to Parke Bancorp, Inc. (NASDAQ:PKBK), around 0.85% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, dishing out 0.0023 percent of its 13F equity portfolio to PKBK.
Now, specific money managers were leading the bulls' herd. Citadel Investment Group, managed by Ken Griffin, initiated the most outsized position in Parke Bancorp, Inc. (NASDAQ:PKBK). Citadel Investment Group had $0.3 million invested in the company at the end of the quarter. Chuck Royce's Royce & Associates also made a $0 million investment in the stock during the quarter.
Let's go over hedge fund activity in other stocks similar to Parke Bancorp, Inc. (NASDAQ:PKBK). We will take a look at Blue Apron Holdings, Inc. (NYSE:APRN), BiomX Inc. (NYSE:PHGE), RedHill Biopharma Ltd (NASDAQ:RDHL), and Summit Therapeutics PLC (NASDAQ:SMMT). This group of stocks' market caps are similar to PKBK's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position APRN,10,24852,1 PHGE,8,18324,0 RDHL,2,652,-1 SMMT,3,18718,0 Average,5.75,15637,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.75 hedge funds with bullish positions and the average amount invested in these stocks was $16 million. That figure was $10 million in PKBK's case. Blue Apron Holdings, Inc. (NYSE:APRN) is the most popular stock in this table. On the other hand RedHill Biopharma Ltd (NASDAQ:RDHL) is the least popular one with only 2 bullish hedge fund positions. Parke Bancorp, Inc. (NASDAQ:PKBK) 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 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 8.3% in 2020 through the end of May and surpassed the market by 13.2 percentage points. Unfortunately PKBK wasn't nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); PKBK investors were disappointed as the stock returned 4.7% during the second 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 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.