We are still in an overall bull market and many stocks that smart money investors were piling into surged through the end of November. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 54% and 51% respectively. Hedge funds' top 3 stock picks returned 41.7% this year and beat the S&P 500 ETFs by 14 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That's why we believe it isn't a waste of time to check out hedge fund sentiment before you invest in a stock like First Busey Corporation (NASDAQ:BUSE).
First Busey Corporation (NASDAQ:BUSE) was in 10 hedge funds' portfolios at the end of September. BUSE investors should pay attention to a decrease in activity from the world's largest hedge funds of late. There were 11 hedge funds in our database with BUSE holdings at the end of the previous quarter. Our calculations also showed that BUSE isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
To most market participants, hedge funds are seen as underperforming, old investment vehicles of years past. While there are over 8000 funds trading today, Our experts choose to focus on the top tier of this group, around 750 funds. It is estimated that this group of investors direct most of the smart money's total capital, and by shadowing their highest performing picks, Insider Monkey has brought to light a few investment strategies that have historically surpassed the market. Insider Monkey's flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points per annum 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_26073" align="alignnone" width="600"] Jim Simons of Renaissance Technologies[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world's largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds' buy/sell signals. We're going to go over the latest hedge fund action surrounding First Busey Corporation (NASDAQ:BUSE).
How are hedge funds trading First Busey Corporation (NASDAQ:BUSE)?
At the end of the third quarter, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -9% from the previous quarter. By comparison, 14 hedge funds held shares or bullish call options in BUSE a year ago. With hedge funds' capital changing hands, there exists an "upper tier" of key hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in First Busey Corporation (NASDAQ:BUSE), which was worth $26.4 million at the end of the third quarter. On the second spot was Millennium Management which amassed $5.8 million worth of shares. Arrowstreet Capital, Basswood Capital, and D E Shaw were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Basswood Capital allocated the biggest weight to First Busey Corporation (NASDAQ:BUSE), around 0.22% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, earmarking 0.02 percent of its 13F equity portfolio to BUSE.
Because First Busey Corporation (NASDAQ:BUSE) has experienced bearish sentiment from the aggregate hedge fund industry, logic holds that there exists a select few funds who were dropping their positions entirely last quarter. Interestingly, Roger Ibbotson's Zebra Capital Management cut the largest stake of all the hedgies followed by Insider Monkey, totaling about $0.3 million in stock. Thomas Bailard's fund, Bailard Inc, also sold off its stock, about $0.2 million worth. These moves are interesting, as total hedge fund interest dropped by 1 funds last quarter.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as First Busey Corporation (NASDAQ:BUSE) but similarly valued. These stocks are CorVel Corporation (NASDAQ:CRVL), FormFactor, Inc. (NASDAQ:FORM), Rush Enterprises, Inc. (NASDAQ:RUSHA), and GCP Applied Technologies Inc. (NYSE:GCP). All of these stocks' market caps are closest to BUSE's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CRVL,14,139590,-1 FORM,19,68794,5 RUSHA,20,63597,0 GCP,21,341720,-2 Average,18.5,153425,0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.5 hedge funds with bullish positions and the average amount invested in these stocks was $153 million. That figure was $44 million in BUSE's case. GCP Applied Technologies Inc. (NYSE:GCP) is the most popular stock in this table. On the other hand CorVel Corporation (NASDAQ:CRVL) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks First Busey Corporation (NASDAQ:BUSE) is even less popular than CRVL. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on BUSE, though not to the same extent, as the stock returned 6.1% during the fourth quarter (through 11/30) and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.