Is Northfield Bancorp Inc (NFBK) A Good Stock To Buy?
The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. 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 Northfield Bancorp Inc (NASDAQ:NFBK).
Is Northfield Bancorp (NFBK) a good stock to buy now? NFBK investors should be aware of an increase in hedge fund sentiment of late. Northfield Bancorp Inc (NASDAQ:NFBK) was in 8 hedge funds' portfolios at the end of September. The all time high for this statistics is 9. Our calculations also showed that NFBK 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.
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 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Peter Rathjens of Arrowstreet Capital
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 15 best blue chip stocks 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. 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 website. Keeping this in mind we're going to review the fresh hedge fund action regarding Northfield Bancorp Inc (NASDAQ:NFBK).
How have hedgies been trading Northfield Bancorp Inc (NASDAQ:NFBK)?
At Q3's end, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 14% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards NFBK over the last 21 quarters. With hedge funds' capital changing hands, there exists a few key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Renaissance Technologies has the biggest position in Northfield Bancorp Inc (NASDAQ:NFBK), worth close to $20.4 million, amounting to less than 0.1%% of its total 13F portfolio. The second most bullish fund manager is Cliff Asness of AQR Capital Management, with a $2.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining peers that are bullish encompass Paul Marshall and Ian Wace's Marshall Wace LLP, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital and D. E. Shaw's D E Shaw. In terms of the portfolio weights assigned to each position Renaissance Technologies allocated the biggest weight to Northfield Bancorp Inc (NASDAQ:NFBK), around 0.02% of its 13F portfolio. Marshall Wace LLP is also relatively very bullish on the stock, dishing out 0.01 percent of its 13F equity portfolio to NFBK.
Now, some big names were breaking ground themselves. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the largest position in Northfield Bancorp Inc (NASDAQ:NFBK). Marshall Wace LLP had $1.9 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital also initiated a $1 million position during the quarter.
Let's go over hedge fund activity in other stocks similar to Northfield Bancorp Inc (NASDAQ:NFBK). These stocks are US Concrete Inc (NASDAQ:USCR), Homology Medicines, Inc. (NASDAQ:FIXX), CAI International Inc (NYSE:CAI), Plantronics, Inc. (NYSE:PLT), Banco Latinoamericano de Comercio Exterior, S.A. (NYSE:BLX), MagnaChip Semiconductor Corporation (NYSE:MX), and Preferred Bank (NASDAQ:PFBC). This group of stocks' market valuations match NFBK's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position USCR,9,25583,0 FIXX,11,18591,-5 CAI,10,118924,1 PLT,14,20398,4 BLX,2,9318,-1 MX,27,252487,2 PFBC,10,20264,1 Average,11.9,66509,0.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.9 hedge funds with bullish positions and the average amount invested in these stocks was $67 million. That figure was $28 million in NFBK's case. MagnaChip Semiconductor Corporation (NYSE:MX) is the most popular stock in this table. On the other hand Banco Latinoamericano de Comercio Exterior, S.A. (NYSE:BLX) is the least popular one with only 2 bullish hedge fund positions. Northfield Bancorp Inc (NASDAQ:NFBK) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for NFBK is 44.7. 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 31.6% in 2020 through December 2nd and still beat the market by 16 percentage points. A small number of hedge funds were also right about betting on NFBK as the stock returned 27.3% since the end of the third quarter (through 12/2) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
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