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In this article we will analyze whether Southern Missouri Bancorp, Inc. (NASDAQ:SMBC) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There's no better way to get these firms' immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.
Southern Missouri Bancorp, Inc. (NASDAQ:SMBC) was in 4 hedge funds' portfolios at the end of September. The all time high for this statistics is 5. SMBC investors should pay attention to an increase in activity from the world's largest hedge funds lately. There were 3 hedge funds in our database with SMBC positions at the end of the second quarter. Our calculations also showed that SMBC isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
According to most traders, hedge funds are viewed as slow, outdated financial vehicles of yesteryear. While there are more than 8000 funds in operation today, We hone in on the elite of this group, about 850 funds. These investment experts preside over the lion's share of the hedge fund industry's total capital, and by following their inimitable picks, Insider Monkey has unsheathed various investment strategies that have historically surpassed the S&P 500 index. Insider Monkey's flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
Chuck Royce of Royce & Associates
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind let's take a peek at the new hedge fund action surrounding Southern Missouri Bancorp, Inc. (NASDAQ:SMBC).
Hedge fund activity in Southern Missouri Bancorp, Inc. (NASDAQ:SMBC)
At Q3's end, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 33% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards SMBC over the last 21 quarters. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Chuck Royce's Royce & Associates has the biggest position in Southern Missouri Bancorp, Inc. (NASDAQ:SMBC), worth close to $3.4 million, comprising less than 0.1%% of its total 13F portfolio. Coming in second is Renaissance Technologies, holding a $3.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers with similar optimism include Roger Ibbotson's Zebra Capital Management, Israel Englander's Millennium Management and . In terms of the portfolio weights assigned to each position Zebra Capital Management allocated the biggest weight to Southern Missouri Bancorp, Inc. (NASDAQ:SMBC), around 0.46% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, designating 0.04 percent of its 13F equity portfolio to SMBC.
Now, key hedge funds were leading the bulls' herd. Zebra Capital Management, managed by Roger Ibbotson, created the most outsized position in Southern Missouri Bancorp, Inc. (NASDAQ:SMBC). Zebra Capital Management had $0.3 million invested in the company at the end of the quarter.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Southern Missouri Bancorp, Inc. (NASDAQ:SMBC) but similarly valued. These stocks are CapStar Financial Holdings, Inc. (NASDAQ:CSTR), Greenhill & Co., Inc. (NYSE:GHL), Pure Cycle Corporation (NASDAQ:PCYO), Hersha Hospitality Trust (NYSE:HT), LogicBio Therapeutics, Inc. (NASDAQ:LOGC), Fathom Holdings Inc. (NASDAQ:FTHM), and Haynes International, Inc. (NASDAQ:HAYN). This group of stocks' market caps are similar to SMBC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CSTR,6,10020,-1 GHL,9,15174,-4 PCYO,11,56424,-3 HT,12,13849,0 LOGC,4,70426,0 FTHM,3,5099,3 HAYN,14,30370,1 Average,8.4,28766,-0.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.4 hedge funds with bullish positions and the average amount invested in these stocks was $29 million. That figure was $7 million in SMBC's case. Haynes International, Inc. (NASDAQ:HAYN) is the most popular stock in this table. On the other hand Fathom Holdings Inc. (NASDAQ:FTHM) is the least popular one with only 3 bullish hedge fund positions. Southern Missouri Bancorp, Inc. (NASDAQ:SMBC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SMBC is 34.5. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on SMBC as the stock returned 30.8% since the end of the third quarter (through 11/27) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.