The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the first quarter, which unveil their equity positions as of March 31st. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Mackinac Financial Corporation (NASDAQ:MFNC).
Mackinac Financial Corporation (NASDAQ:MFNC) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 5 hedge funds' portfolios at the end of the first quarter of 2021. Our calculations also showed that MFNC 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 Colony Bankcorp Inc (NASDAQ:CBAN), IMARA Inc. (NASDAQ:IMRA), and Bogota Financial Corp. (NASDAQ:BSBK) to gather more data points.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Jeffrey Gendell of Tontine Asset Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $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 analyze the latest hedge fund action surrounding Mackinac Financial Corporation (NASDAQ:MFNC).
Do Hedge Funds Think MFNC Is A Good Stock To Buy Now?
At the end of March, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. By comparison, 5 hedge funds held shares or bullish call options in MFNC a year ago. With hedge funds' sentiment swirling, there exists a select group of key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
The largest stake in Mackinac Financial Corporation (NASDAQ:MFNC) was held by EJF Capital, which reported holding $7.4 million worth of stock at the end of December. It was followed by Tontine Asset Management with a $2.6 million position. Other investors bullish on the company included Fourthstone LLC, Minerva Advisors, and Renaissance Technologies. In terms of the portfolio weights assigned to each position EJF Capital allocated the biggest weight to Mackinac Financial Corporation (NASDAQ:MFNC), around 0.53% of its 13F portfolio. Fourthstone LLC is also relatively very bullish on the stock, setting aside 0.3 percent of its 13F equity portfolio to MFNC.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Zebra Capital Management. 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 Fourthstone LLC).
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Mackinac Financial Corporation (NASDAQ:MFNC) but similarly valued. We will take a look at Colony Bankcorp Inc (NASDAQ:CBAN), IMARA Inc. (NASDAQ:IMRA), Bogota Financial Corp. (NASDAQ:BSBK), Anixa Biosciences, Inc. (NASDAQ:ANIX), County Bancorp, Inc. (NASDAQ:ICBK), Vericity, Inc. (NASDAQ:VERY), and Charah Solutions, Inc. (NYSE:CHRA). All of these stocks' market caps match MFNC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CBAN,5,16277,0 IMRA,5,26014,0 BSBK,1,188,1 ANIX,2,156,0 ICBK,3,5549,0 VERY,2,730,0 CHRA,4,27022,2 Average,3.1,10848,0.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.1 hedge funds with bullish positions and the average amount invested in these stocks was $11 million. That figure was $11 million in MFNC's case. Colony Bankcorp Inc (NASDAQ:CBAN) is the most popular stock in this table. On the other hand Bogota Financial Corp. (NASDAQ:BSBK) is the least popular one with only 1 bullish hedge fund positions. Mackinac Financial Corporation (NASDAQ:MFNC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MFNC is 76.4. 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 17.4% in 2021 through June 18th and still beat the market by 6.1 percentage points. Hedge funds were also right about betting on MFNC as the stock returned 42.5% since the end of Q1 (through 6/18) 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.