Hedge funds are not perfect. They have their bad picks just like everyone else. Facebook, a stock hedge funds have loved, lost nearly 40% of its value at one point in 2018. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 15 S&P 500 stocks among hedge funds at the end of December 2018 yielded an average return of 19.7% year-to-date, vs. a gain of 13.1% for the S&P 500 Index. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of Hometrust Bancshares Inc (NASDAQ:HTBI).
Hedge fund interest in Hometrust Bancshares Inc (NASDAQ:HTBI) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare HTBI to other stocks including Transenterix Inc (NYSEMKT:TRXC), Forty Seven, Inc. (NASDAQ:FTSV), and Whitestone REIT (NYSE:WSR) to get a better sense of its popularity.
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.
We're going to go over the latest hedge fund action surrounding Hometrust Bancshares Inc (NASDAQ:HTBI).
How have hedgies been trading Hometrust Bancshares Inc (NASDAQ:HTBI)?
Heading into the first quarter of 2019, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards HTBI over the last 14 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Hometrust Bancshares Inc (NASDAQ:HTBI) was held by Impax Asset Management, which reported holding $26.4 million worth of stock at the end of December. It was followed by Renaissance Technologies with a $19.2 million position. Other investors bullish on the company included Private Capital Management, Prospector Partners, and Royce & Associates.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren't any hedge funds dumping their holdings during the third quarter, there weren't any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven't identified any viable catalysts that can attract investor attention.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Hometrust Bancshares Inc (NASDAQ:HTBI) but similarly valued. We will take a look at Transenterix Inc (NYSE:TRXC), Forty Seven, Inc. (NASDAQ:FTSV), Whitestone REIT (NYSE:WSR), and Matrix Service Co (NASDAQ:MTRX). This group of stocks' market values resemble HTBI's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TRXC,8,11314,-6 FTSV,6,23618,-1 WSR,6,15615,3 MTRX,19,46462,7 Average,9.75,24252,0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.75 hedge funds with bullish positions and the average amount invested in these stocks was $24 million. That figure was $65 million in HTBI's case. Matrix Service Co (NASDAQ:MTRX) is the most popular stock in this table. On the other hand Forty Seven, Inc. (NASDAQ:FTSV) is the least popular one with only 6 bullish hedge fund positions. Hometrust Bancshares Inc (NASDAQ:HTBI) 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 HTBI wasn't nearly as popular as these 15 stock (hedge fund sentiment was quite bearish); HTBI investors were disappointed as the stock returned -3% 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.