A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended March 31st, so let’s proceed with the discussion of the hedge fund sentiment on Huttig Building Products, Inc. (NASDAQ:HBP).
Is HBP a good stock to buy? Huttig Building Products, Inc. (NASDAQ:HBP) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 3 hedge funds' portfolios at the end of March. Our calculations also showed that HBP isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). 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 Soleno Therapeutics, Inc. (NASDAQ:SLNO), Castor Maritime Inc. (NASDAQ:CTRM), and Oragenics Inc. (NYSE:OGEN) to gather more data points.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can't expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds' moves today.
Ken Griffin of Citadel Investment Group
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $26 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind let's review the key hedge fund action regarding Huttig Building Products, Inc. (NASDAQ:HBP).
Do Hedge Funds Think HBP Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards HBP over the last 23 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.
Among these funds, Mill Road Capital Management held the most valuable stake in Huttig Building Products, Inc. (NASDAQ:HBP), which was worth $8.4 million at the end of the fourth quarter. On the second spot was Renaissance Technologies which amassed $2.2 million worth of shares. Citadel Investment Group was 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 Mill Road Capital Management allocated the biggest weight to Huttig Building Products, Inc. (NASDAQ:HBP), around 2.78% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, designating 0.0028 percent of its 13F equity portfolio to HBP.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Phoenician Capital. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Citadel Investment Group).
Let's also examine hedge fund activity in other stocks similar to Huttig Building Products, Inc. (NASDAQ:HBP). These stocks are Soleno Therapeutics, Inc. (NASDAQ:SLNO), Castor Maritime Inc. (NASDAQ:CTRM), Oragenics Inc. (NYSE:OGEN), DAVIDsTEA Inc. (NASDAQ:DTEA), Summit State Bank (NASDAQ:SSBI), Cocrystal Pharma, Inc. (NASDAQ:COCP), and Natural Alternatives International, Inc. (NASDAQ:NAII). This group of stocks' market values match HBP's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SLNO,8,11931,-4 CTRM,1,5174,-3 OGEN,1,336,0 DTEA,3,451,1 SSBI,1,202,0 COCP,1,5914,-2 NAII,2,7546,1 Average,2.4,4508,-1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 2.4 hedge funds with bullish positions and the average amount invested in these stocks was $5 million. That figure was $11 million in HBP's case. Soleno Therapeutics, Inc. (NASDAQ:SLNO) is the most popular stock in this table. On the other hand Castor Maritime Inc. (NASDAQ:CTRM) is the least popular one with only 1 bullish hedge fund positions. Huttig Building Products, Inc. (NASDAQ:HBP) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HBP is 29.3. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. Hedge funds were also right about betting on HBP as the stock returned 67.2% since the end of Q1 (through 6/11) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.