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Is BCB Bancorp, Inc. (NASDAQ:BCBP) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
BCB Bancorp, Inc. (NASDAQ:BCBP) shareholders have witnessed a decrease in hedge fund interest lately. BCB Bancorp, Inc. (NASDAQ:BCBP) was in 3 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistics is 6. There were 4 hedge funds in our database with BCBP positions at the end of the second quarter. Our calculations also showed that BCBP 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.
In today’s marketplace there are a multitude of metrics investors use to analyze their holdings. A duo of the less utilized metrics are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the best investment managers can outperform the S&P 500 by a significant margin (see the details here).
Michael Price of MFP Investors
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 10 most profitable companies in the world 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 check out the recent hedge fund action encompassing BCB Bancorp, Inc. (NASDAQ:BCBP).
How have hedgies been trading BCB Bancorp, Inc. (NASDAQ:BCBP)?
At Q3's end, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of -25% from the second quarter of 2020. By comparison, 3 hedge funds held shares or bullish call options in BCBP a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
The largest stake in BCB Bancorp, Inc. (NASDAQ:BCBP) was held by MFP Investors, which reported holding $8.2 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $4 million position. The only other hedge fund that is bullish on the company was Winton Capital Management.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Zebra Capital Management. 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 none of the 750+ hedge funds tracked by Insider Monkey identified BCBP as a viable investment and initiated a position in the stock.
Let's check out hedge fund activity in other stocks similar to BCB Bancorp, Inc. (NASDAQ:BCBP). We will take a look at Infrastructure and Energy Alternatives, Inc. (NASDAQ:IEA), Lantronix Inc (NASDAQ:LTRX), Ocean Bio-Chem, Inc. (NASDAQ:OBCI), XpresSpa Group, Inc. (NASDAQ:XSPA), PFSweb, Inc. (NASDAQ:PFSW), EDAP TMS S.A. (NASDAQ:EDAP), and PCB Bancorp (NASDAQ:PCB). This group of stocks' market values resemble BCBP's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position IEA,7,16703,0 LTRX,4,5861,0 OBCI,2,4284,1 XSPA,3,2502,0 PFSW,8,15762,1 EDAP,3,9159,0 PCB,4,14857,0 Average,4.4,9875,0.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 4.4 hedge funds with bullish positions and the average amount invested in these stocks was $10 million. That figure was $13 million in BCBP's case. PFSweb, Inc. (NASDAQ:PFSW) is the most popular stock in this table. On the other hand Ocean Bio-Chem, Inc. (NASDAQ:OBCI) is the least popular one with only 2 bullish hedge fund positions. BCB Bancorp, Inc. (NASDAQ:BCBP) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BCBP is 27.3. 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 28.1% in 2020 through November 23rd and still beat the market by 15.4 percentage points. A small number of hedge funds were also right about betting on BCBP as the stock returned 32.8% since the end of the third quarter (through 11/23) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.