Riverview Financial Corporation (RIVE): Hedge Funds De-risking
Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Riverview Financial Corporation (NASDAQ:RIVE).
Riverview Financial Corporation (NASDAQ:RIVE) investors should pay attention to a decrease in activity from the world's largest hedge funds in recent months. Our calculations also showed that RIVE 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.
To most shareholders, hedge funds are viewed as unimportant, outdated investment vehicles of yesteryear. While there are greater than 8000 funds with their doors open at present, Our experts choose to focus on the bigwigs of this club, around 850 funds. It is estimated that this group of investors preside over bulk of all hedge funds' total asset base, and by tracking their highest performing picks, Insider Monkey has revealed several investment strategies that have historically outstripped the S&P 500 index. Insider Monkey's flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points per annum 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="400"]
Israel Englander of Millennium Management[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. 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 the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we're going to review the latest hedge fund action surrounding Riverview Financial Corporation (NASDAQ:RIVE).
How are hedge funds trading Riverview Financial Corporation (NASDAQ:RIVE)?
Heading into the second quarter of 2020, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of -29% from the previous quarter. The graph below displays the number of hedge funds with bullish position in RIVE over the last 18 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, EJF Capital held the most valuable stake in Riverview Financial Corporation (NASDAQ:RIVE), which was worth $2.6 million at the end of the third quarter. On the second spot was Tontine Asset Management which amassed $1.5 million worth of shares. Castine Capital Management, Millennium Management, and Minerva Advisors were 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 Castine Capital Management allocated the biggest weight to Riverview Financial Corporation (NASDAQ:RIVE), around 0.66% of its 13F portfolio. EJF Capital is also relatively very bullish on the stock, designating 0.56 percent of its 13F equity portfolio to RIVE.
Since Riverview Financial Corporation (NASDAQ:RIVE) has experienced a decline in interest from the aggregate hedge fund industry, it's easy to see that there is a sect of funds that slashed their positions entirely by the end of the first quarter. At the top of the heap, Phil Stone's Fourthstone LLC said goodbye to the biggest stake of the "upper crust" of funds watched by Insider Monkey, comprising an estimated $0.8 million in stock. Renaissance Technologies, also said goodbye to its stock, about $0.2 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 2 funds by the end of the first quarter.
Let's check out hedge fund activity in other stocks similar to Riverview Financial Corporation (NASDAQ:RIVE). These stocks are Randolph Bancorp, Inc. (NASDAQ:RNDB), Goodrich Petroleum Corporation (NYSE:GDP), Enlivex Therapeutics Ltd. (NASDAQ:ENLV), and Kaixin Auto Holdings (NASDAQ:KXIN). This group of stocks' market values are similar to RIVE's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RNDB,2,1572,0 GDP,4,10519,0 ENLV,2,2531,1 KXIN,1,58,-1 Average,2.25,3670,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 2.25 hedge funds with bullish positions and the average amount invested in these stocks was $4 million. That figure was $6 million in RIVE's case. Goodrich Petroleum Corporation (NYSE:GDP) is the most popular stock in this table. On the other hand Kaixin Auto Holdings (NASDAQ:KXIN) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Riverview Financial Corporation (NASDAQ:RIVE) is more popular among hedge funds. 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 8.3% in 2020 through the end of May and still beat the market by 13.2 percentage points. Unfortunately RIVE wasn't nearly as popular as these 10 stocks and hedge funds that were betting on RIVE were disappointed as the stock returned -7.6% during the second quarter (through the end of May) 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.
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Disclosure: None. This article was originally published at Insider Monkey.
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