The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards First Seacoast Bancorp (NASDAQ:FSEA).
Hedge fund interest in First Seacoast Bancorp (NASDAQ:FSEA) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as ARC Document Solutions Inc (NYSE:ARC), Cocrystal Pharma, Inc. (NASDAQ:COCP), and Air T, Inc. (NASDAQ:AIRT) to gather more data points. Our calculations also showed that FSEA isn't among the 30 most popular stocks among hedge funds (click for Q1 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.
In the eyes of most market participants, hedge funds are assumed to be slow, old investment tools of years past. While there are greater than 8000 funds in operation today, Our experts look at the moguls of this club, about 850 funds. These hedge fund managers direct bulk of the hedge fund industry's total capital, and by monitoring their matchless stock picks, Insider Monkey has formulated several investment strategies that have historically exceeded Mr. Market. Insider Monkey's flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points annually 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_27480" align="aligncenter" width="399"] Israel Englander of Millennium Management[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. We interview hedge fund managers and ask them about their best ideas. You can watch our latest hedge fund manager interview here and find out the name of the large-cap healthcare stock that Sio Capital's Michael Castor expects to double. 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 S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we're going to take a gander at the new hedge fund action surrounding First Seacoast Bancorp (NASDAQ:FSEA).
How have hedgies been trading First Seacoast Bancorp (NASDAQ:FSEA)?
At Q1's end, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in FSEA over the last 18 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists an "upper tier" of notable hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
The largest stake in First Seacoast Bancorp (NASDAQ:FSEA) was held by Castine Capital Management, which reported holding $1 million worth of stock at the end of September. It was followed by Polaris Capital Management with a $0.1 million position. The only other hedge fund that is bullish on the company was Millennium Management.
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 also examine hedge fund activity in other stocks - not necessarily in the same industry as First Seacoast Bancorp (NASDAQ:FSEA) but similarly valued. These stocks are ARC Document Solutions Inc (NYSE:ARC), Cocrystal Pharma, Inc. (NASDAQ:COCP), Air T, Inc. (NASDAQ:AIRT), and Houston Wire & Cable Company (NASDAQ:HWCC). This group of stocks' market values match FSEA's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ARC,5,3019,-3 COCP,3,1381,1 AIRT,1,2586,0 HWCC,7,8095,0 Average,4,3770,-0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 4 hedge funds with bullish positions and the average amount invested in these stocks was $4 million. That figure was $1 million in FSEA's case. Houston Wire & Cable Company (NASDAQ:HWCC) is the most popular stock in this table. On the other hand Air T, Inc. (NASDAQ:AIRT) is the least popular one with only 1 bullish hedge fund positions. First Seacoast Bancorp (NASDAQ:FSEA) 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 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 7.9% in 2020 through May 22nd and surpassed the market by 15.6 percentage points. Unfortunately FSEA wasn't nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); FSEA investors were disappointed as the stock returned -3% during the second quarter 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 most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.