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 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. What do these smart investors think about S & T Bancorp Inc (NASDAQ:STBA)?
Is S & T Bancorp Inc (NASDAQ:STBA) a buy here? Investors who are in the know are selling. The number of bullish hedge fund bets dropped by 5 recently. Our calculations also showed that STBA 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 44 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_673876" align="aligncenter" width="399"] John Overdeck of Two Sigma Advisors[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like this one. 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. Keeping this in mind let's analyze the latest hedge fund action surrounding S & T Bancorp Inc (NASDAQ:STBA).
How have hedgies been trading S & T Bancorp Inc (NASDAQ:STBA)?
At Q1's end, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of -56% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards STBA 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, Citadel Investment Group, managed by Ken Griffin, holds the biggest position in S & T Bancorp Inc (NASDAQ:STBA). Citadel Investment Group has a $1.4 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, with a $0.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other professional money managers that hold long positions comprise Israel Englander's Millennium Management, John Overdeck and David Siegel's Two Sigma Advisors and . In terms of the portfolio weights assigned to each position Millennium Management allocated the biggest weight to S & T Bancorp Inc (NASDAQ:STBA), around 0.001% of its 13F portfolio. Two Sigma Advisors is also relatively very bullish on the stock, earmarking 0.001 percent of its 13F equity portfolio to STBA.
Judging by the fact that S & T Bancorp Inc (NASDAQ:STBA) has faced falling interest from the aggregate hedge fund industry, logic holds that there exists a select few hedgies who sold off their positions entirely in the third quarter. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital cut the largest position of the "upper crust" of funds tracked by Insider Monkey, comprising an estimated $1.5 million in stock. D. E. Shaw's fund, D E Shaw, also sold off its stock, about $1 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 5 funds in the third quarter.
Let's check out hedge fund activity in other stocks similar to S & T Bancorp Inc (NASDAQ:STBA). These stocks are Amneal Pharmaceuticals, Inc. (NYSE:AMRX), Air Transport Services Group Inc. (NASDAQ:ATSG), Tompkins Financial Corporation (NYSE:TMP), and PC Connection, Inc. (NASDAQ:CNXN). This group of stocks' market valuations are closest to STBA's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AMRX,7,4326,-3 ATSG,22,116281,2 TMP,4,14209,-2 CNXN,10,43318,-5 Average,10.75,44534,-2 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $45 million. That figure was $3 million in STBA's case. Air Transport Services Group Inc. (NASDAQ:ATSG) is the most popular stock in this table. On the other hand Tompkins Financial Corporation (NYSE:TMP) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks S & T Bancorp Inc (NASDAQ:STBA) is even less popular than TMP. Hedge funds dodged a bullet by taking a bearish stance towards STBA. 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 8.3% in 2020 through the end of May but managed to beat the market by 13.2 percentage points. Unfortunately STBA wasn't nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); STBA investors were disappointed as the stock returned -17.5% 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 so far in 2020.
Disclosure: None. This article was originally published at Insider Monkey.