Hedge Funds Are Crazy About Seacoast Banking Corporation of Florida (SBCF)

Reputable billionaire investors such as Nelson Peltz and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.

Is Seacoast Banking Corporation of Florida (NASDAQ:SBCF) an exceptional stock to buy now? The best stock pickers are categorically becoming more confident. The number of bullish hedge fund bets that are revealed through the 13F filings inched up by 1 recently. SBCF was in 14 hedge funds’ portfolios at the end of the third quarter of 2016. There were 13 hedge funds in our database with SBCF positions at the end of the previous quarter. 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 Ardelyx Inc (NASDAQ:ARDX), Intellia Therapeutics Inc (NASDAQ:NTLA), and National Presto Industries Inc. (NYSE:NPK) to gather more data points.

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What have hedge funds been doing with Seacoast Banking Corporation of Florida (NASDAQ:SBCF)?

At the end of the third quarter, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a rise of 8% from the second quarter of 2016. By comparison, 12 hedge funds held shares or bullish call options in SBCF heading into this year. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

HedgeFundSentimentChart

According to Insider Monkey’s hedge fund database, Matthew Lindenbaum’s Basswood Capital has the largest position in Seacoast Banking Corporation of Florida (NASDAQ:SBCF), worth close to $34.9 million, corresponding to 1.7% of its total 13F portfolio. The second largest stake is held by Israel Englander of Millennium Management, one of the 10 largest hedge funds in the world, which reported a $9.3 million position. Remaining members of the smart money that hold long positions consist of Gregg J. Powers’ Private Capital Management, Jim Simons’ Renaissance Technologies and Paul Magidson, Jonathan Cohen. And Ostrom Enders’ Castine Capital 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.

Now, specific money managers have been driving this bullishness. Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital assembled the largest position in Seacoast Banking Corporation of Florida (NASDAQ:SBCF). Arrowstreet Capital had $1.6 million invested in the company at the end of the quarter. Eric Halet and Davide Serra’s Algebris Investments also made a $0.7 million investment in the stock during the quarter. The only other fund with a brand new SBCF position is Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.

Let’s now take a look at hedge fund activity in other stocks similar to Seacoast Banking Corporation of Florida (NASDAQ:SBCF). We will take a look at Ardelyx Inc (NASDAQ:ARDX), Intellia Therapeutics Inc (NASDAQ:NTLA), National Presto Industries Inc. (NYSE:NPK), and TriCo Bancshares (NASDAQ:TCBK). This group of stocks’ market values match SBCF’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ARDX 13 142188 4
NTLA 9 74463 1
NPK 12 80818 -1
TCBK 7 27881 1

As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $81 million. That figure was $80 million in SBCF’s case. Ardelyx Inc (NASDAQ:ARDX) is the most popular stock in this table. On the other hand TriCo Bancshares (NASDAQ:TCBK) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Seacoast Banking Corporation of Florida (NASDAQ:SBCF) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

Disclosure: None