Last year's fourth quarter was a rough one for investors and many hedge funds, which were naturally unable to overcome the big dip in the broad market, as the S&P 500 fell by about 4.8% during 2018 and average hedge fund losing about 1%. The Russell 2000, composed of smaller companies, performed even worse, trailing the S&P by more than 6 percentage points, as investors fled less-known quantities for safe havens. Luckily hedge funds were shifting their holdings into large-cap stocks. The 20 most popular hedge fund stocks actually generated an average return of 34.7% in 2019 (through November 22nd) and outperformed the S&P 500 ETF by 8.5 percentage points. We are done processing the latest 13f filings and in this article we will study how hedge fund sentiment towards Provident Bancorp, Inc. (NASDAQ:PVBC) changed during the first quarter.
Is Provident Bancorp, Inc. (NASDAQ:PVBC) a bargain? The best stock pickers are warming up to the stock, but the overall sentiment is still bearish. The number of bullish hedge fund positions advanced by 1 recently. Our calculations also showed that PVBC isn't among the 30 most popular stocks among hedge funds. PVBC was in 3 hedge funds' portfolios at the end of the third quarter of 2019. There were 2 hedge funds in our database with PVBC positions at the end of the previous quarter.
If you'd ask most traders, hedge funds are perceived as slow, outdated financial tools of yesteryear. While there are greater than 8000 funds trading at present, We hone in on the masters of this club, about 750 funds. These investment experts control most of the smart money's total asset base, and by following their best investments, Insider Monkey has brought to light many investment strategies that have historically outperformed Mr. Market. Insider Monkey's flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points a year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
[caption id="attachment_224708" align="aligncenter" width="464"] New York Stock Exchange[/caption]
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world's most bearish hedge fund that's more convinced than ever that a crash is coming, our long-short investment strategy doesn't rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds' buy/sell signals. Let's take a gander at the key hedge fund action regarding Provident Bancorp, Inc. (NASDAQ:PVBC).
Hedge fund activity in Provident Bancorp, Inc. (NASDAQ:PVBC)
At Q3's end, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of 50% from the previous quarter. By comparison, 3 hedge funds held shares or bullish call options in PVBC a year ago. With hedgies' capital changing hands, there exists a few notable hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Paul Magidson, Jonathan Cohen. And Ostrom Enders's Castine Capital Management has the most valuable position in Provident Bancorp, Inc. (NASDAQ:PVBC), worth close to $6.3 million, comprising 1.7% of its total 13F portfolio. On Castine Capital Management's heels is Seidman Investment Partnership, managed by Lawrence Seidman, which holds a $0.5 million position; 0.4% of its 13F portfolio is allocated to the company. In terms of the portfolio weights assigned to each position Castine Capital Management allocated the biggest weight to Provident Bancorp, Inc. (NASDAQ:PVBC), around 1.72% of its portfolio. Seidman Investment Partnership is also relatively very bullish on the stock, dishing out 0.41 percent of its 13F equity portfolio to PVBC.
As industrywide interest jumped, some big names were leading the bulls' herd. Renaissance Technologies, assembled the most outsized position in Provident Bancorp, Inc. (NASDAQ:PVBC). Renaissance Technologies had $0.4 million invested in the company at the end of the quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Provident Bancorp, Inc. (NASDAQ:PVBC) but similarly valued. We will take a look at Concrete Pumping Holdings, Inc. (NASDAQ:BBCP), Trilogy Metals Inc. (NYSE:TMQ), Express, Inc. (NYSE:EXPR), and Mirum Pharmaceuticals, Inc. (NASDAQ:MIRM). This group of stocks' market valuations are similar to PVBC's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BBCP,9,45723,-1 TMQ,14,86483,0 EXPR,14,36867,1 MIRM,7,83998,7 Average,11,63268,1.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $63 million. That figure was $7 million in PVBC's case. Trilogy Metals Inc. (NYSE:TMQ) is the most popular stock in this table. On the other hand Mirum Pharmaceuticals, Inc. (NASDAQ:MIRM) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Provident Bancorp, Inc. (NASDAQ:PVBC) is even less popular than MIRM. Hedge funds dodged a bullet by taking a bearish stance towards PVBC. Our calculations showed that the top 20 most popular hedge fund stocks returned 34.7% in 2019 through November 22nd and outperformed the S&P 500 ETF (SPY) by 8.5 percentage points. Unfortunately PVBC wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); PVBC investors were disappointed as the stock returned -1.9% during the fourth quarter (through 11/22) 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.