In this article you are going to find out whether hedge funds think Seacoast Banking Corporation of Florida (NASDAQ:SBCF) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It's not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Hedge fund interest in Seacoast Banking Corporation of Florida (NASDAQ:SBCF) 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 SBCF to other stocks including Glu Mobile Inc. (NASDAQ:GLUU), Cardtronics plc (NASDAQ:CATM), and Murphy Oil Corporation (NYSE:MUR) to get a better sense of its popularity. Video: Watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are many methods market participants use to size up publicly traded companies. A pair of the best methods are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the top picks of the best investment managers can trounce the market by a solid margin (see the details here).
[caption id="attachment_193003" align="aligncenter" width="400"] Chuck Royce of Royce & Associates[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let's analyze the key hedge fund action encompassing Seacoast Banking Corporation of Florida (NASDAQ:SBCF).
How are hedge funds trading Seacoast Banking Corporation of Florida (NASDAQ:SBCF)?
Heading into the second quarter of 2020, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in SBCF 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.
Of the funds tracked by Insider Monkey, Chuck Royce's Royce & Associates has the biggest position in Seacoast Banking Corporation of Florida (NASDAQ:SBCF), worth close to $5.5 million, accounting for 0.1% of its total 13F portfolio. On Royce & Associates's heels is Mendon Capital Advisors, led by Anton Schutz, holding a $1.5 million position; 0.7% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors with similar optimism include Dmitry Balyasny's Balyasny Asset Management, Ken Griffin's Citadel Investment Group and Mario Gabelli's GAMCO Investors. In terms of the portfolio weights assigned to each position Mendon Capital Advisors allocated the biggest weight to Seacoast Banking Corporation of Florida (NASDAQ:SBCF), around 0.75% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, dishing out 0.08 percent of its 13F equity portfolio to SBCF.
Because Seacoast Banking Corporation of Florida (NASDAQ:SBCF) has faced a decline in interest from the entirety of the hedge funds we track, we can see that there were a few fund managers who were dropping their positions entirely heading into Q4. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital dumped the biggest investment of the 750 funds monitored by Insider Monkey, valued at about $1.5 million in stock. Minhua Zhang's fund, Weld Capital Management, also dropped its stock, about $0.3 million worth. These bearish behaviors are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Seacoast Banking Corporation of Florida (NASDAQ:SBCF) but similarly valued. These stocks are Glu Mobile Inc. (NASDAQ:GLUU), Cardtronics plc (NASDAQ:CATM), Murphy Oil Corporation (NYSE:MUR), and Aimmune Therapeutics Inc (NASDAQ:AIMT). This group of stocks' market values match SBCF's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GLUU,18,113910,-2 CATM,17,246532,-5 MUR,20,46262,-4 AIMT,18,138411,5 Average,18.25,136279,-1.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.25 hedge funds with bullish positions and the average amount invested in these stocks was $136 million. That figure was $11 million in SBCF's case. Murphy Oil Corporation (NYSE:MUR) is the most popular stock in this table. On the other hand Cardtronics plc (NASDAQ:CATM) is the least popular one with only 17 bullish hedge fund positions. Compared to these stocks Seacoast Banking Corporation of Florida (NASDAQ:SBCF) is even less popular than CATM. Hedge funds dodged a bullet by taking a bearish stance towards SBCF. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.2% in 2020 through June 17th but managed to beat the market by 14.8 percentage points. Unfortunately SBCF wasn't nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); SBCF investors were disappointed as the stock returned 13.2% during the second quarter (through June 17th) 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 so far in 2020.
Disclosure: None. This article was originally published at Insider Monkey.