The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded Investar Holding Corporation (NASDAQ:ISTR) based on those filings.
Investar Holding Corporation (NASDAQ:ISTR) shares haven't seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 7 hedge funds' portfolios at the end of March. At the end of this article we will also compare ISTR to other stocks including Stratus Properties Inc. (NASDAQ:STRS), North American Construction Group Ltd. (NYSE:NOA), and Akazoo S.A. (NASDAQ:SONG) to get a better sense of its popularity. Video: Watch our video about the top 5 most popular hedge fund stocks.
If you'd ask most traders, hedge funds are perceived as unimportant, outdated financial vehicles of years past. While there are over 8000 funds trading at the moment, Our researchers look at the elite of this group, around 850 funds. These hedge fund managers command most of the hedge fund industry's total asset base, and by keeping an eye on their finest investments, Insider Monkey has uncovered various investment strategies that have historically surpassed the broader indices. Insider Monkey's flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
[caption id="attachment_26073" align="aligncenter" width="400"] Jim Simons of Renaissance Technologies[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let's take a look at the key hedge fund action surrounding Investar Holding Corporation (NASDAQ:ISTR).
What have hedge funds been doing with Investar Holding Corporation (NASDAQ:ISTR)?
At Q1's end, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in ISTR over the last 18 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, EJF Capital was the largest shareholder of Investar Holding Corporation (NASDAQ:ISTR), with a stake worth $5.1 million reported as of the end of September. Trailing EJF Capital was Royce & Associates, which amassed a stake valued at $2.6 million. Mendon Capital Advisors, Forest Hill Capital, and Renaissance Technologies 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 Mendon Capital Advisors allocated the biggest weight to Investar Holding Corporation (NASDAQ:ISTR), around 1.1% of its 13F portfolio. Forest Hill Capital is also relatively very bullish on the stock, setting aside 1.09 percent of its 13F equity portfolio to ISTR.
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 first 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 go over hedge fund activity in other stocks - not necessarily in the same industry as Investar Holding Corporation (NASDAQ:ISTR) but similarly valued. These stocks are Stratus Properties Inc. (NASDAQ:STRS), North American Construction Group Ltd. (NYSE:NOA), Akazoo S.A. (NASDAQ:SONG), and FNCB Bancorp Inc. (NASDAQ:FNCB). This group of stocks' market caps match ISTR's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position STRS,2,20497,-1 NOA,11,20183,1 SONG,7,3254,0 FNCB,2,164,1 Average,5.5,11025,0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.5 hedge funds with bullish positions and the average amount invested in these stocks was $11 million. That figure was $14 million in ISTR's case. North American Construction Group Ltd. (NYSE:NOA) is the most popular stock in this table. On the other hand Stratus Properties Inc. (NASDAQ:STRS) is the least popular one with only 2 bullish hedge fund positions. Investar Holding Corporation (NASDAQ:ISTR) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th but beat the market by 14.2 percentage points. Unfortunately ISTR wasn't nearly as popular as these 10 stocks and hedge funds that were betting on ISTR were disappointed as the stock returned 22.5% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.