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In this article we will analyze whether Bank of Marin Bancorp (NASDAQ:BMRC) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There's no better way to get these firms' immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.
Is Bank of Marin Bancorp (NASDAQ:BMRC) an outstanding stock to buy now? Investors who are in the know were turning less bullish. The number of long hedge fund bets fell by 1 lately. Bank of Marin Bancorp (NASDAQ:BMRC) was in 4 hedge funds' portfolios at the end of March. The all time high for this statistic is 8. Our calculations also showed that BMRC isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 115 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Noam Gottesman of GLG Partners
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $29 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let's take a peek at the new hedge fund action encompassing Bank of Marin Bancorp (NASDAQ:BMRC).
Do Hedge Funds Think BMRC Is A Good Stock To Buy Now?
At the end of March, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -20% from the previous quarter. By comparison, 6 hedge funds held shares or bullish call options in BMRC 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.
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, holds the most valuable position in Bank of Marin Bancorp (NASDAQ:BMRC). Renaissance Technologies has a $7.5 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Ken Griffin of Citadel Investment Group, with a $1.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other peers that are bullish consist of Noam Gottesman's GLG Partners, John Overdeck and David Siegel's Two Sigma Advisors and . In terms of the portfolio weights assigned to each position Renaissance Technologies allocated the biggest weight to Bank of Marin Bancorp (NASDAQ:BMRC), around 0.01% of its 13F portfolio. GLG Partners is also relatively very bullish on the stock, designating 0.0028 percent of its 13F equity portfolio to BMRC.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Winton Capital Management. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because none of the 750+ hedge funds tracked by Insider Monkey identified BMRC as a viable investment and initiated a position in the stock.
Let's go over hedge fund activity in other stocks similar to Bank of Marin Bancorp (NASDAQ:BMRC). These stocks are Barrett Business Services, Inc. (NASDAQ:BBSI), American Superconductor Corporation (NASDAQ:AMSC), Neoleukin Therapeutics, Inc. (NASDAQ:NLTX), TherapeuticsMD Inc (NASDAQ:TXMD), Akebia Therapeutics Inc (NASDAQ:AKBA), Five Point Holdings, LLC (NYSE:FPH), and Select Energy Services, Inc. (NYSE:WTTR). This group of stocks' market values resemble BMRC's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BBSI,9,52973,-5 AMSC,11,32776,0 NLTX,13,187201,-2 TXMD,14,27828,2 AKBA,11,33793,-2 FPH,12,244012,0 WTTR,17,27816,3 Average,12.4,86628,-0.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.4 hedge funds with bullish positions and the average amount invested in these stocks was $87 million. That figure was $10 million in BMRC's case. Select Energy Services, Inc. (NYSE:WTTR) is the most popular stock in this table. On the other hand Barrett Business Services, Inc. (NASDAQ:BBSI) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Bank of Marin Bancorp (NASDAQ:BMRC) is even less popular than BBSI. Our overall hedge fund sentiment score for BMRC is 19. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Hedge funds dodged a bullet by taking a bearish stance towards BMRC. Our calculations showed that the top 10 most popular hedge fund stocks returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th but managed to beat the market again by 3.3 percentage points. Unfortunately BMRC wasn't nearly as popular as these 5 stocks (hedge fund sentiment was very bearish); BMRC investors were disappointed as the stock returned -16.1% since the end of the first quarter (through 6/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.