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Do Hedge Funds Love First Bancorp (FBNC)?

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The worries about the election and the ongoing uncertainty about the path of interest-rate increases have been keeping investors on the sidelines. Of course, most hedge funds and other asset managers have been underperforming main stock market indices since the middle of 2015. Interestingly though, smaller-cap stocks registered their best performance relative to the large-capitalization stocks since the end of the June quarter, suggesting that this may be the best time to take a cue from their stock picks. In fact, the Russell 2000 Index gained more than 15% since the beginning of the third quarter, while the Standard and Poor’s 500 benchmark returned less than 6%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards First Bancorp (NASDAQ:FBNC) .

Hedge fund interest in First Bancorp (NASDAQ:FBNC) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Whitestone REIT (NYSE:WSR), NanoString Technologies Inc (NASDAQ:NSTG), and DICE HOLDINGS, INC. (NYSE:DHX) to gather more data points.

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We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.

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With all of this in mind, let’s take a peek at the new action regarding First Bancorp (NASDAQ:FBNC).

How have hedgies been trading First Bancorp (NASDAQ:FBNC)?

Heading into the fourth quarter of 2016, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards FBNC over the last 5 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their stakes significantly (or already accumulated large positions).

HedgeFundSentimentChart

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, EJF Capital, led by Emanuel J. Friedman, holds the most valuable position in First Bancorp (NASDAQ:FBNC). EJF Capital has a $12.7 million position in the stock, comprising 1% of its 13F portfolio. On EJF Capital’s heels is Renaissance Technologies, one of the largest hedge funds in the world, holding a $6.1 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other peers that hold long positions contain Joe Huber’s Huber Capital Management, Matthew Lindenbaum’s Basswood Capital and Israel Englander’s Millennium Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

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