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How Veritex Holdings Inc (VBTX) Stacks Up Against Its Peers

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The successful funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at Veritex Holdings Inc (NASDAQ:VBTX) from the perspective of those successful funds.

Veritex Holdings Inc (NASDAQ:VBTX) was in 6 hedge funds’ portfolios at the end of September. VBTX investors should be aware of a decrease in hedge fund sentiment recently. There were 7 hedge funds in our database with VBTX 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 Alliance One International, Inc. (NYSE:AOI), Southern Missouri Bancorp, Inc. (NASDAQ:SMBC), and Solar Senior Capital Ltd (NASDAQ:SUNS) to gather more data points.

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We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.

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How have hedgies been trading Veritex Holdings Inc (NASDAQ:VBTX)?

At the end of the third quarter, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 14% decrease from the previous quarter. The graph below displays the number of hedge funds with bullish position in VBTX over the last 5 quarters. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

vbtx

When looking at the institutional investors followed by Insider Monkey, Basswood Capital, led by Matthew Lindenbaum, holds the biggest position in Veritex Holdings Inc (NASDAQ:VBTX). Basswood Capital has a $17.1 million position in the stock. Coming in second is Fred Cummings of Elizabeth Park Capital Management, with a $3.7 million position; the fund has 1.6% of its 13F portfolio invested in the stock. Remaining peers that hold long positions comprise Paul Magidson, Jonathan Cohen. And Ostrom Enders’s Castine Capital Management, Mark Lee’s Forest Hill Capital and Jim Simons’ Renaissance Technologies, one of the largest hedge funds in the world. 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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