Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the first quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Sierra Bancorp (NASDAQ:BSRR) based on that data.
Sierra Bancorp (NASDAQ:BSRR) was in 5 hedge funds' portfolios at the end of the first quarter of 2020. BSRR has seen a decrease in support from the world's most elite money managers of late. There were 8 hedge funds in our database with BSRR positions at the end of the previous quarter. Our calculations also showed that BSRR 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.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 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 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_728717" align="aligncenter" width="400"] Roger Ibbotson of Zebra Capital 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. With all of this in mind let's take a gander at the fresh hedge fund action surrounding Sierra Bancorp (NASDAQ:BSRR).
How are hedge funds trading Sierra Bancorp (NASDAQ:BSRR)?
Heading into the second quarter of 2020, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -38% from the fourth quarter of 2019. On the other hand, there were a total of 6 hedge funds with a bullish position in BSRR a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists an "upper tier" of key hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in Sierra Bancorp (NASDAQ:BSRR), which was worth $7.2 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $0.7 million worth of shares. Winton Capital Management, Two Sigma Advisors, and GLG Partners 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 Winton Capital Management allocated the biggest weight to Sierra Bancorp (NASDAQ:BSRR), around 0.02% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, earmarking 0.01 percent of its 13F equity portfolio to BSRR.
Seeing as Sierra Bancorp (NASDAQ:BSRR) has faced bearish sentiment from the aggregate hedge fund industry, it's easy to see that there was a specific group of money managers that elected to cut their entire stakes last quarter. Interestingly, Israel Englander's Millennium Management dropped the biggest stake of the "upper crust" of funds monitored by Insider Monkey, worth about $1 million in stock, and D. E. Shaw's D E Shaw was right behind this move, as the fund dumped about $0.3 million worth. These moves are important to note, as total hedge fund interest dropped by 3 funds last quarter.
Let's go over hedge fund activity in other stocks similar to Sierra Bancorp (NASDAQ:BSRR). These stocks are Genco Shipping & Trading Limited (NYSE:GNK), Pioneer Bancorp, Inc. (NASDAQ:PBFS), Red River Bancshares, Inc. (NASDAQ:RRBI), and AdvanSix Inc. (NYSE:ASIX). This group of stocks' market caps are similar to BSRR's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GNK,12,135482,-4 PBFS,4,2873,1 RRBI,2,959,0 ASIX,13,44050,0 Average,7.75,45841,-0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.75 hedge funds with bullish positions and the average amount invested in these stocks was $46 million. That figure was $10 million in BSRR's case. AdvanSix Inc. (NYSE:ASIX) is the most popular stock in this table. On the other hand Red River Bancshares, Inc. (NASDAQ:RRBI) is the least popular one with only 2 bullish hedge fund positions. Sierra Bancorp (NASDAQ:BSRR) 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 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 surpassed the market by 13.2 percentage points. Unfortunately BSRR wasn't nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); BSRR investors were disappointed as the stock returned 8.2% during the second quarter 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.
Disclosure: None. This article was originally published at Insider Monkey.