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The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on September 30th, about a month before the elections. We at Insider Monkey have made an extensive database of more than 817 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded OP Bancorp (NASDAQ:OPBK) based on those filings.
OP Bancorp (NASDAQ:OPBK) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 4 hedge funds' portfolios at the end of the third quarter of 2020. Our calculations also showed that OPBK 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 OPBK to other stocks including Bank7 Corp. (NASDAQ:BSVN), Avino Silver & Gold Mines Ltd. (NYSE:ASM), and FedNat Holding Co (NASDAQ:FNHC) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Roger Ibbotson of Zebra Capital Management
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. Keeping this in mind we're going to take a gander at the recent hedge fund action regarding OP Bancorp (NASDAQ:OPBK).
How are hedge funds trading OP Bancorp (NASDAQ:OPBK)?
Heading into the fourth quarter of 2020, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards OPBK over the last 21 quarters. With hedge funds' capital changing hands, there exists a few key hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, EJF Capital, managed by Emanuel J. Friedman, holds the most valuable position in OP Bancorp (NASDAQ:OPBK). EJF Capital has a $4.9 million position in the stock, comprising 0.4% of its 13F portfolio. The second most bullish fund manager is Renaissance Technologies, founded by Jim Simons, holding a $0.5 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other peers with similar optimism comprise Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, Roger Ibbotson's Zebra Capital Management and . In terms of the portfolio weights assigned to each position EJF Capital allocated the biggest weight to OP Bancorp (NASDAQ:OPBK), around 0.41% of its 13F portfolio. Zebra Capital Management is also relatively very bullish on the stock, designating 0.31 percent of its 13F equity portfolio to OPBK.
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 OP Bancorp (NASDAQ:OPBK) but similarly valued. These stocks are Bank7 Corp. (NASDAQ:BSVN), Avino Silver & Gold Mines Ltd. (NYSE:ASM), FedNat Holding Co (NASDAQ:FNHC), Abeona Therapeutics Inc (NASDAQ:ABEO), Magal Security Systems Ltd. (NASDAQ:MAGS), Jianpu Technology Inc. (NYSE:JT), and Prudential Bancorp, Inc. (NASDAQ:PBIP). This group of stocks' market caps are similar to OPBK's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BSVN,2,474,0 ASM,3,342,0 FNHC,7,6542,-1 ABEO,14,17856,-4 MAGS,2,2837,0 JT,4,1986,0 PBIP,2,12606,-1 Average,4.9,6092,-0.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 4.9 hedge funds with bullish positions and the average amount invested in these stocks was $6 million. That figure was $6 million in OPBK's case. Abeona Therapeutics Inc (NASDAQ:ABEO) is the most popular stock in this table. On the other hand Bank7 Corp. (NASDAQ:BSVN) is the least popular one with only 2 bullish hedge fund positions. OP Bancorp (NASDAQ:OPBK) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for OPBK is 30.5. 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 OPBK as the stock returned 29.4% 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.