Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is BCB Bancorp, Inc. (NASDAQ:BCBP), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
BCB Bancorp, Inc. (NASDAQ:BCBP) investors should be aware of a decrease in hedge fund interest lately. BCB Bancorp, Inc. (NASDAQ:BCBP) was in 3 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 6. There were 4 hedge funds in our database with BCBP holdings at the end of December. Our calculations also showed that BCBP isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can't expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds' moves today.
Michael Price of MFP Investors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $26 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 go over the latest hedge fund action regarding BCB Bancorp, Inc. (NASDAQ:BCBP).
Do Hedge Funds Think BCBP Is A Good Stock To Buy Now?
At the end of March, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -25% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in BCBP over the last 23 quarters. With the smart money's sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, MFP Investors, managed by Michael Price, holds the most valuable position in BCB Bancorp, Inc. (NASDAQ:BCBP). MFP Investors has a $14.1 million position in the stock, comprising 1.7% of its 13F portfolio. The second most bullish fund is Renaissance Technologies, with a $6.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other peers with similar optimism consist of Israel Englander's Millennium Management, and Ken Griffin's Citadel Investment Group. In terms of the portfolio weights assigned to each position MFP Investors allocated the biggest weight to BCB Bancorp, Inc. (NASDAQ:BCBP), around 1.69% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, earmarking 0.01 percent of its 13F equity portfolio to BCBP.
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 only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was PEAK6 Capital Management).
Let's now take a look at hedge fund activity in other stocks similar to BCB Bancorp, Inc. (NASDAQ:BCBP). These stocks are FVCBankcorp, Inc. (NASDAQ:FVCB), Solar Senior Capital Ltd (NASDAQ:SUNS), Franklin Wireless Corp. (NASDAQ:FKWL), HireQuest, Inc. (NASDAQ:HQI), LG Display Co Ltd. (NYSE:LPL), KVH Industries, Inc. (NASDAQ:KVHI), and Ames National Corporation (NASDAQ:ATLO). This group of stocks' market values are similar to BCBP's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FVCB,3,5130,0 SUNS,3,2228,0 FKWL,2,15745,2 HQI,3,4775,2 LPL,9,21826,2 KVHI,5,15989,1 ATLO,3,11589,0 Average,4,11040,1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 4 hedge funds with bullish positions and the average amount invested in these stocks was $11 million. That figure was $21 million in BCBP's case. LG Display Co Ltd. (NYSE:LPL) is the most popular stock in this table. On the other hand Franklin Wireless Corp. (NASDAQ:FKWL) is the least popular one with only 2 bullish hedge fund positions. BCB Bancorp, Inc. (NASDAQ:BCBP) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BCBP is 26.1. 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. 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 5 most popular stocks among hedge funds 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 and surpassed the market again by 3.3 percentage points. Unfortunately BCBP wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); BCBP investors were disappointed as the stock returned 1.3% since the end of March (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 in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.