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A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on SmartFinancial, Inc. (NASDAQ:SMBK).
Is SmartFinancial (SMBK) a good stock to buy now? SMBK shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 7 hedge funds' portfolios at the end of September. Our calculations also showed that SMBK 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). The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as ADMA Biologics Inc (NASDAQ:ADMA), Cyclerion Therapeutics, Inc. (NASDAQ:CYCN), and Genasys Inc. (NASDAQ:GNSS) to gather more data points.
Video: Watch our video about the top 5 most popular hedge fund stocks.
If you'd ask most shareholders, hedge funds are seen as underperforming, old financial vehicles of yesteryear. While there are more than 8000 funds trading at present, We choose to focus on the crème de la crème of this club, around 850 funds. These hedge fund managers command bulk of the smart money's total capital, and by observing their highest performing picks, Insider Monkey has figured out a number of investment strategies that have historically outpaced the market. Insider Monkey's flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
Emanuel Friedman of EJF 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. With all of this in mind we're going to take a peek at the latest hedge fund action encompassing SmartFinancial, Inc. (NASDAQ:SMBK).
How are hedge funds trading SmartFinancial, Inc. (NASDAQ:SMBK)?
At Q3's end, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 7 hedge funds with a bullish position in SMBK a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in SmartFinancial, Inc. (NASDAQ:SMBK) was held by Private Capital Management, which reported holding $5.7 million worth of stock at the end of September. It was followed by EJF Capital with a $3.9 million position. Other investors bullish on the company included Renaissance Technologies, Forest Hill Capital, and Winton Capital Management. In terms of the portfolio weights assigned to each position Forest Hill Capital allocated the biggest weight to SmartFinancial, Inc. (NASDAQ:SMBK), around 1.35% of its 13F portfolio. Private Capital Management is also relatively very bullish on the stock, designating 1.3 percent of its 13F equity portfolio to SMBK.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Two Sigma Advisors. One hedge fund selling its entire position doesn't always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don't think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Millennium Management).
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as SmartFinancial, Inc. (NASDAQ:SMBK) but similarly valued. These stocks are ADMA Biologics Inc (NASDAQ:ADMA), Cyclerion Therapeutics, Inc. (NASDAQ:CYCN), Genasys Inc. (NASDAQ:GNSS), Venator Materials PLC (NYSE:VNTR), Caledonia Mining Corporation Plc (NYSE:CMCL), Lifetime Brands Inc (NASDAQ:LCUT), and Gamida Cell Ltd. (NASDAQ:GMDA). This group of stocks' market caps resemble SMBK's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ADMA,20,64337,-1 CYCN,6,69953,-5 GNSS,5,20993,0 VNTR,10,20533,1 CMCL,4,4812,1 LCUT,5,2117,3 GMDA,10,31096,1 Average,8.6,30549,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.6 hedge funds with bullish positions and the average amount invested in these stocks was $31 million. That figure was $17 million in SMBK's case. ADMA Biologics Inc (NASDAQ:ADMA) is the most popular stock in this table. On the other hand Caledonia Mining Corporation Plc (NYSE:CMCL) is the least popular one with only 4 bullish hedge fund positions. SmartFinancial, Inc. (NASDAQ:SMBK) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SMBK is 40.6. 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 SMBK as the stock returned 34.8% 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.