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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. Insider Monkey finished processing 817 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of September 30th, 2020. In this article we are going to take a look at smart money sentiment towards Southern National Bancorp of Virginia, Inc (NASDAQ:SONA).
Is SONA a good stock to buy now? Southern National Bancorp of Virginia, Inc (NASDAQ:SONA) was in 9 hedge funds' portfolios at the end of September. The all time high for this statistics is 10. SONA shareholders have witnessed a decrease in support from the world's most elite money managers recently. There were 10 hedge funds in our database with SONA holdings at the end of June. Our calculations also showed that SONA 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).
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 66 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 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Andre Perold of HighVista Strategies
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 let's take a gander at the fresh hedge fund action surrounding Southern National Bancorp of Virginia, Inc (NASDAQ:SONA).
Do Hedge Funds Think SONA Is A Good Stock To Buy Now?
At Q3's end, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -10% from the previous quarter. On the other hand, there were a total of 9 hedge funds with a bullish position in SONA a year ago. With hedgies' capital changing hands, there exists an "upper tier" of noteworthy hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
The largest stake in Southern National Bancorp of Virginia, Inc (NASDAQ:SONA) was held by Renaissance Technologies, which reported holding $4.8 million worth of stock at the end of September. It was followed by Winton Capital Management with a $0.7 million position. Other investors bullish on the company included Fourthstone LLC, D E Shaw, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Zebra Capital Management allocated the biggest weight to Southern National Bancorp of Virginia, Inc (NASDAQ:SONA), around 0.6% of its 13F portfolio. Fourthstone LLC is also relatively very bullish on the stock, dishing out 0.57 percent of its 13F equity portfolio to SONA.
Seeing as Southern National Bancorp of Virginia, Inc (NASDAQ:SONA) has faced declining sentiment from the smart money, we can see that there were a few hedgies that decided to sell off their full holdings heading into Q4. It's worth mentioning that Chuck Royce's Royce & Associates dumped the largest stake of the 750 funds monitored by Insider Monkey, valued at an estimated $1.9 million in stock, and Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital was right behind this move, as the fund dropped about $0.2 million worth. These transactions are interesting, as total hedge fund interest fell by 1 funds heading into Q4.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Southern National Bancorp of Virginia, Inc (NASDAQ:SONA) but similarly valued. These stocks are Energy Fuels Inc (NYSE:UUUU), Nathan's Famous, Inc. (NASDAQ:NATH), Falcon Minerals Corporation (NASDAQ:FLMN), Oasis Midstream Partners LP (NASDAQ:OMP), Maui Land & Pineapple Company, Inc. (NYSE:MLP), Alpine Immune Sciences, Inc. (NASDAQ:ALPN), and YRC Worldwide, Inc. (NASDAQ:YRCW). This group of stocks' market caps are similar to SONA's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position UUUU,3,953,-3 NATH,5,25066,1 FLMN,20,20183,-1 OMP,3,1741,0 MLP,4,8841,1 ALPN,12,81013,7 YRCW,9,8497,-1 Average,8,20899,0.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $21 million. That figure was $9 million in SONA's case. Falcon Minerals Corporation (NASDAQ:FLMN) is the most popular stock in this table. On the other hand Energy Fuels Inc (NYSE:UUUU) is the least popular one with only 3 bullish hedge fund positions. Southern National Bancorp of Virginia, Inc (NASDAQ:SONA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SONA is 48.6. 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 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. Hedge funds were also right about betting on SONA as the stock returned 34.1% since the end of Q3 (through 12/8) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.