We at Insider Monkey have gone over 730 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 June 28th. In this article, we look at what those funds think of CenterState Banks Inc (NASDAQ:CSFL) based on that data.
Is CenterState Banks Inc (NASDAQ:CSFL) the right pick for your portfolio? Money managers are in a bearish mood. The number of long hedge fund bets retreated by 1 recently. Our calculations also showed that CSFL isn't among the 30 most popular stocks among hedge funds (view video below). CSFL was in 15 hedge funds' portfolios at the end of the second quarter of 2019. There were 16 hedge funds in our database with CSFL holdings at the end of the previous quarter. Video: Click the image to 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 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 market by 40 percentage points since May 2014 through May 30, 2019 (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 25.7% through September 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let's take a gander at the fresh hedge fund action encompassing CenterState Banks Inc (NASDAQ:CSFL).
How are hedge funds trading CenterState Banks Inc (NASDAQ:CSFL)?
Heading into the third quarter of 2019, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of -6% from the previous quarter. On the other hand, there were a total of 19 hedge funds with a bullish position in CSFL 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.
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies has the largest position in CenterState Banks Inc (NASDAQ:CSFL), worth close to $39.7 million, corresponding to less than 0.1%% of its total 13F portfolio. On Renaissance Technologies's heels is Chuck Royce of Royce & Associates, with a $13.1 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors that hold long positions comprise Mark Lee's Forest Hill Capital, Paul Magidson, Jonathan Cohen. And Ostrom Enders's Castine Capital Management and Michael O'Keefe's 12th Street Asset Management.
Due to the fact that CenterState Banks Inc (NASDAQ:CSFL) has experienced declining sentiment from the smart money, logic holds that there was a specific group of funds who sold off their positions entirely heading into Q3. It's worth mentioning that Israel Englander's Millennium Management said goodbye to the biggest position of all the hedgies monitored by Insider Monkey, valued at close to $23.7 million in stock, and Gregg Moskowitz's Interval Partners was right behind this move, as the fund cut about $2.5 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 1 funds heading into Q3.
Let's now take a look at hedge fund activity in other stocks similar to CenterState Banks Inc (NASDAQ:CSFL). These stocks are Solaredge Technologies Inc (NASDAQ:SEDG), NuVasive, Inc. (NASDAQ:NUVA), HMS Holdings Corp. (NASDAQ:HMSY), and Houlihan Lokey Inc (NYSE:HLI). All of these stocks' market caps are similar to CSFL's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SEDG,23,145921,1 NUVA,24,267479,4 HMSY,21,186302,-5 HLI,15,124317,1 Average,20.75,181005,0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.75 hedge funds with bullish positions and the average amount invested in these stocks was $181 million. That figure was $104 million in CSFL's case. NuVasive, Inc. (NASDAQ:NUVA) is the most popular stock in this table. On the other hand Houlihan Lokey Inc (NYSE:HLI) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks CenterState Banks Inc (NASDAQ:CSFL) is even less popular than HLI. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. A small number of hedge funds were also right about betting on CSFL, though not to the same extent, as the stock returned 4.6% during the third quarter and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.