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. We at Insider Monkey have plowed through 752 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of September 30th. In this article we look at what those investors think of Rhinebeck Bancorp, Inc. (NASDAQ:RBKB).
Hedge fund interest in Rhinebeck Bancorp, Inc. (NASDAQ:RBKB) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare RBKB to other stocks including Tanzanian Gold Corporation (NYSE:TRX), Auryn Resources Inc. (NYSE:AUG), and Sesen Bio, Inc. (NASDAQ:SESN) to get a better sense of its popularity. Video: Click the image to 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 hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (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 27.8% through November 21, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_140292" align="aligncenter" width="424"] Israel Englander of Millennium Management[/caption]
Let's take a look at the fresh hedge fund action regarding Rhinebeck Bancorp, Inc. (NASDAQ:RBKB).
How have hedgies been trading Rhinebeck Bancorp, Inc. (NASDAQ:RBKB)?
At the end of the third quarter, a total of 2 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in RBKB over the last 17 quarters. With hedge funds' sentiment swirling, there exists a select group of noteworthy hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Emanuel J. Friedman's EJF Capital has the largest position in Rhinebeck Bancorp, Inc. (NASDAQ:RBKB), worth close to $7.1 million, comprising 1% of its total 13F portfolio. The second most bullish fund manager is Millennium Management, led by Israel Englander, holding a $0.5 million position; less than 0.1%% of its 13F portfolio is allocated to the company.
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 now review hedge fund activity in other stocks - not necessarily in the same industry as Rhinebeck Bancorp, Inc. (NASDAQ:RBKB) but similarly valued. These stocks are Tanzanian Gold Corporation (NYSE:TRX), Auryn Resources Inc. (NYSE:AUG), Sesen Bio, Inc. (NASDAQ:SESN), and Information Services Group, Inc. (NASDAQ:III). This group of stocks' market caps are closest to RBKB's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TRX,1,17,-1 AUG,3,596,1 SESN,3,7262,-2 III,5,20966,0 Average,3,7210,-0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 3 hedge funds with bullish positions and the average amount invested in these stocks was $7 million. That figure was $8 million in RBKB's case. Information Services Group, Inc. (NASDAQ:III) is the most popular stock in this table. On the other hand Tanzanian Gold Corporation (NYSE:TRX) is the least popular one with only 1 bullish hedge fund positions. Rhinebeck Bancorp, Inc. (NASDAQ:RBKB) 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 20 most popular stocks among hedge funds returned 34.7% in 2019 through November 22nd and outperformed the S&P 500 ETF (SPY) by 8.5 percentage points. Unfortunately RBKB wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); RBKB investors were disappointed as the stock returned 1.7% during the fourth quarter (through 11/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.