Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
Is Eagle Bancorp, Inc. (NASDAQ:EGBN) the right pick for your portfolio? Hedge funds are buying. The number of bullish hedge fund positions inched up by 1 in recent months. 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 OSI Systems, Inc. (NASDAQ:OSIS), Virtusa Corporation (NASDAQ:VRTU), and LTC Properties Inc (NYSE:LTC) to gather more data points.
Follow Eagle Bancorp Inc (NASDAQ:EGBN)
Follow Eagle Bancorp Inc (NASDAQ:EGBN)
At the moment there are a lot of signals investors put to use to evaluate their holdings. A couple of the most underrated signals are hedge fund and insider trading interest. We have shown that, historically, those who follow the best picks of the elite investment managers can outclass the market by a very impressive margin (see the details here).
With all of this in mind, let’s view the recent action surrounding Eagle Bancorp, Inc. (NASDAQ:EGBN).
What have hedge funds been doing with Eagle Bancorp, Inc. (NASDAQ:EGBN)?
Heading into Q4, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 10% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Mark Lee’s Forest Hill Capital has the biggest position in Eagle Bancorp, Inc. (NASDAQ:EGBN), worth close to $40.2 million, amounting to 3.8% of its total 13F portfolio. On Forest Hill Capital’s heels is Lee Munder Capital Group, led by Lee Munder, holding an $33.8 million position; 0.7% of its 13F portfolio is allocated to the stock. Some other hedge funds and institutional investors that hold long positions comprise Fred Cummings’ Elizabeth Park Capital Management, Jim Simons’ Renaissance Technologies, and Ken Fisher’s Fisher Asset Management.
As industrywide interest jumped, some big names were breaking ground themselves. Fisher Asset Management, managed by Ken Fisher, initiated the most valuable position in Eagle Bancorp, Inc. (NASDAQ:EGBN). Fisher Asset Management had $2.9 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also made an $0.5 million investment in the stock during the quarter. The only other fund with a brand new EGBN position is David Costen Haley’s HBK Investments.
Let’s now review hedge fund activity in other stocks similar to Eagle Bancorp, Inc. (NASDAQ:EGBN). We will take a look at OSI Systems, Inc. (NASDAQ:OSIS), Virtusa Corporation (NASDAQ:VRTU), LTC Properties Inc (NYSE:LTC), and Seaspan Corporation (NYSE:SSW). This group of stocks’ market valuations match EGBN’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OSIS | 11 | 62197 | 0 |
| VRTU | 9 | 24778 | 0 |
| LTC | 8 | 11909 | 3 |
| SSW | 7 | 24084 | 0 |
As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $31 million, lower than the $106 million in EGBN’s case. OSI Systems, Inc. (NASDAQ:OSIS) is the most popular stock in this table with a total of 11 funds reporting long positions, the same as in Eagle Bancorp, Inc. (NASDAQ:EGBN). Therefore, taking into account that hedge funds like this stock in relation to its market cap peers, it may be a good idea to analyze it in more detail and potentially include it in your portfolio.
