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Here’s What Hedge Funds Think About Byline Bancorp, Inc. (BY)

Nina Todic

Before we spend countless hours researching a company, we'd like to analyze what insiders, hedge funds and billionaire investors think of the stock first. We would like to do so because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Byline Bancorp, Inc. (NYSE:BY).

Byline Bancorp, Inc. (NYSE:BY) was in 6 hedge funds' portfolios at the end of December. BY investors should be aware of an increase in enthusiasm from smart money of late. There were 4 hedge funds in our database with BY positions at the end of the previous quarter. Our calculations also showed that by isn't among the 30 most popular stocks among hedge funds.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Millennium Management, Catapult Capital Management
Millennium Management, Catapult Capital Management

We're going to check out the new hedge fund action encompassing Byline Bancorp, Inc. (NYSE:BY).

What does the smart money think about Byline Bancorp, Inc. (NYSE:BY)?

At Q4's end, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a change of 50% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards BY over the last 14 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds with BY Positions
No of Hedge Funds with BY Positions

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Anton Schutz's Mendon Capital Advisors has the most valuable position in Byline Bancorp, Inc. (NYSE:BY), worth close to $14.3 million, amounting to 1.7% of its total 13F portfolio. The second largest stake is held by Castine Capital Management, managed by Paul Magidson, Jonathan Cohen. And Ostrom Enders, which holds a $2.2 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Some other professional money managers with similar optimism comprise Israel Englander's Millennium Management, Ken Griffin's Citadel Investment Group and Jim Simons's Renaissance Technologies.

As one would reasonably expect, some big names have jumped into Byline Bancorp, Inc. (NYSE:BY) headfirst. Citadel Investment Group, managed by Ken Griffin, assembled the largest position in Byline Bancorp, Inc. (NYSE:BY). Citadel Investment Group had $1.3 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace's Marshall Wace LLP also initiated a $0.3 million position during the quarter.

Let's also examine hedge fund activity in other stocks similar to Byline Bancorp, Inc. (NYSE:BY). We will take a look at Horizon Bancorp, Inc. (NASDAQ:HBNC), Flushing Financial Corporation (NASDAQ:FFIC), Lantheus Holdings Inc (NASDAQ:LNTH), and Scholar Rock Holding Corporation (NASDAQ:SRRK). This group of stocks' market caps are similar to BY's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position HBNC,6,16821,0 FFIC,7,40961,-1 LNTH,17,65005,1 SRRK,4,80044,0 Average,8.5,50708,0 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 8.5 hedge funds with bullish positions and the average amount invested in these stocks was $51 million. That figure was $20 million in BY's case. Lantheus Holdings Inc (NASDAQ:LNTH) is the most popular stock in this table. On the other hand Scholar Rock Holding Corporation (NASDAQ:SRRK) is the least popular one with only 4 bullish hedge fund positions. Byline Bancorp, Inc. (NYSE:BY) 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 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately BY wasn't nearly as popular as these 15 stock (hedge fund sentiment was quite bearish); BY investors were disappointed as the stock returned 13.1% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.

Disclosure: None. This article was originally published at Insider Monkey.

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