At Insider Monkey, we pore over the filings of nearly 817 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we've gathered as a result gives us access to a wealth of collective knowledge based on these firms' portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not Evans Bancorp Inc. (NYSE:EVBN) makes for a good investment right now.
Hedge fund interest in Evans Bancorp Inc. (NYSE:EVBN) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that EVBN 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). At the end of this article we will also compare EVBN to other stocks including DHI Group Inc. (NYSE:DHX), Saga Communications, Inc. (NYSE:SGA), and Aviat Networks Inc (NASDAQ:AVNW) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
To most traders, hedge funds are perceived as unimportant, old investment vehicles of yesteryear. While there are more than 8000 funds with their doors open at the moment, Our experts choose to focus on the aristocrats of this group, around 850 funds. Most estimates calculate that this group of people shepherd bulk of the smart money's total capital, and by monitoring their first-class equity investments, Insider Monkey has determined a few investment strategies that have historically outrun the S&P 500 index. Insider Monkey's flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points per 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 .
Lawrence Seidman of Seidman Investment Partnership
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. With all of this in mind we're going to view the fresh hedge fund action encompassing Evans Bancorp Inc. (NYSE:EVBN).
Hedge fund activity in Evans Bancorp Inc. (NYSE:EVBN)
At third quarter's end, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in EVBN over the last 21 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, holds the most valuable position in Evans Bancorp Inc. (NYSE:EVBN). Renaissance Technologies has a $0.5 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Seidman Investment Partnership, managed by Lawrence Seidman, which holds a $0.5 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Some other professional money managers that are bullish include Michael Price's MFP Investors, Frederick DiSanto's Ancora Advisors and . In terms of the portfolio weights assigned to each position Seidman Investment Partnership allocated the biggest weight to Evans Bancorp Inc. (NYSE:EVBN), around 0.77% of its 13F portfolio. MFP Investors is also relatively very bullish on the stock, earmarking 0.06 percent of its 13F equity portfolio to EVBN.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren't any hedge funds dumping their holdings during the third quarter, there weren't any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven't identified any viable catalysts that can attract investor attention.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Evans Bancorp Inc. (NYSE:EVBN) but similarly valued. These stocks are DHI Group Inc. (NYSE:DHX), Saga Communications, Inc. (NYSE:SGA), Aviat Networks Inc (NASDAQ:AVNW), ObsEva SA (NASDAQ:OBSV), County Bancorp, Inc. (NASDAQ:ICBK), Ardmore Shipping Corp (NYSE:ASC), and Catabasis Pharmaceuticals Inc (NASDAQ:CATB). This group of stocks' market valuations resemble EVBN's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position DHX,11,30855,-3 SGA,3,10874,0 AVNW,5,27577,0 OBSV,6,17950,-5 ICBK,3,3672,-1 ASC,12,12907,0 CATB,6,3401,-2 Average,6.6,15319,-1.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.6 hedge funds with bullish positions and the average amount invested in these stocks was $15 million. That figure was $1 million in EVBN's case. Ardmore Shipping Corp (NYSE:ASC) is the most popular stock in this table. On the other hand Saga Communications, Inc. (NYSE:SGA) is the least popular one with only 3 bullish hedge fund positions. Evans Bancorp Inc. (NYSE:EVBN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for EVBN is 30.6. 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 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on EVBN as the stock returned 24.1% since the end of the third quarter (through 11/27) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.