In this article, we examined Fred Cummings’ portfolio management strategy and approach to investing in stocks. We also reviewed 10 stocks to buy according to Fred Cummings’ Elizabeth Park Capital.
Fred Cummings is the founder and portfolio manager of Elizabeth Park Capital Management, an Ohio-based independent asset management firm with a focus on long/short equity and event-driven investment strategies. Fred is a renowned banking analyst and institutional investor with over 30 years of experience. His firm seeks to select micro and small-cap US-based banking stocks that offer favorable risk-adjusted returns with lower correlations to the market indices.
For a long-only event-driven strategy, the firm identifies undervalued securities, screens management, and checks credit quality, capital, and many other profitability metrics. On the flipside, Fred Cummings’ Elizabeth Park Capital’s long/short strategy involves taking a directional position based on the fundamentals, quantitative screening, and macro environment.
As of the end of September 2021, Elizabeth Park Capital’s 13F stock portfolio was valued at around $283.2 million. All ten of its top stock holdings, which make up 32% of the portfolio, belong to the financial sector. Furthermore, these stocks also provide dividend income. The 10 stocks to buy according to Fred Cummings’ Elizabeth Park Capital include Citizens Financial Group, Inc. (NYSE:CFG), Signature Bank (NASDAQ:SBNY), First Foundation, Inc. (NASDAQ:FFWM), ConnectOne Bancorp, Inc. (NASDAQ:CNOB), and International Bancshares Corp (NASDAQ:IBOC).
Elizabeth Park Capital’s most favorite stock holdings also include QCR Holdings, Inc. (NASDAQ:QCRH) and Homestreet, Inc. (NASDAQ:HMST). The firm has been holding a stake in QCR Holdings, Inc. (NASDAQ:QCRH) since the second quarter of 2015 while it first initiated a position in Homestreet, Inc. (NASDAQ:HMST) at the end of 2019.
Our Methodology
This analysis is conducted using Elizabeth Park Capital’s 13F portfolio as of September 2021. The following is a list of 10 stocks to buy according to Fred Cummings’ Elizabeth Park Capital.
Stocks to Buy According to Fred Cummings’ Elizabeth Park Capital
10. Citizens Financial Group, Inc. (NYSE:CFG)
Elizabeth Park Capital’s Stake Value: $7.5 million
Percentage of Elizabeth Park Capital’s 13F Portfolio: 2.64%
Number of Hedge Fund Holders: 34
Citizens Financial Group, Inc. (NYSE:CFG) is the long-running stock holding of Fred Cummings’ Elizabeth Park Capital. His firm first initiated a position in Citizens Financial Group, Inc. (NYSE:CFG) during the second quarter of 2016. The company’s share price surged close to 34% in the last twelve months. In addition, Citizens Financial Group, Inc. (NYSE:CFG) offers returns in the form of dividends. Its dividend yield is currently hovering around 2.8%.
Citizens Financial Group, Inc. (NYSE:CFG) has significantly improved its business model and expanded its revenue base since its spinoff from the Royal Bank of Scotland in 2015. The company’s strategy of creating a strong digital consumer business is expected to spur revenue growth in the near future. Its margins will be further boosted by potential interest rate hikes in the quarters to come.
In the fourth quarter of 2021, Citizens Financial Group, Inc. (NYSE:CFG) posted adjusted revenue of $1.72 billion, beating Wall Street’s expectations of $1.66 billion. The company’s profit for the full year was $2.32 billion on revenue of $6.65 billion.
When compared to Elizabeth Park Capital’s most favorite small-cap stock holdings like QCR Holdings, Inc. (QCRH) and Homestreet, Inc. (NASDAQ:HMST), Citizens Financial Group, Inc. (NYSE:CFG) is a mid-cap with a total market capitalization of $23 billion. Citizens Financial Group, Inc. (NYSE:CFG) was in 34 hedge funds’ portfolios at the end of September 2021. Hosking Partners and Factorial Partners were among the leading stakeholders in the company.
9. Signature Bank (NASDAQ:SBNY)
Elizabeth Park Capital’s Stake Value: $7.7 million
Percentage of Elizabeth Park Capital’s 13F Portfolio: 2.72%
Number of Hedge Fund Holders: 46
Signature Bank (NASDAQ:SBNY) is the newcomer in Fred Cummings’ Elizabeth Park Capital’s stock portfolio. The firm bought $7.7 million worth of shares of Signature Bank (NASDAQ:SBNY) during the September quarter of 2021, accounting for 2.72%.
The firm is reaping the benefits of its strategy of purchasing a huge stake in Signature Bank (NASDAQ:SBNY). This is because shares of the New York-based full-service commercial bank surged 30% in the last six months. Signature Bank (NASDAQ:SBNY) also pays a quarterly dividend of $0.56 per share, yielding around 0.67%.
In the fourth quarter investor letter, Alger, an investment management firm, mentioned a few stocks including Signature Bank (NASDAQ:SBNY). Here is what Alger stated about Signature Bank (NASDAQ:SBNY):
“Signature Bank provides business and personal banking products and services, including deposit products such as commercial checking accounts, money market accounts, escrow deposit accounts, and cash concentration accounts. The company also offers loan products, including commercial and industrial loans, real estate loans, and other loan types.
Signature Bank has succeeded in applying its time-tested strategy of growing loans and deposits by expanding into new geographic areas and business lines. In October, Signature Bank reported earnings per share of $3.88 for the third quarter of 2021 compared to publicly available Wall Street estimates of $3.72. This outperformance was driven by strong balance sheet growth, higher fee income, and lower-than-expected loan loss provisions. Deposit growth was very strong with total deposits increasing by approximately $10 billion in the quarter. This was the second strongest quarter in the company’s history trailing only the second quarter of this year). Total loan growth was also very strong, increasing approximately 7.5% from the second quarter.”
8. First Foundation Inc. (NASDAQ:FFWM)
Elizabeth Park Capital’s Stake Value: $8 million
Percentage of Elizabeth Park Capital’s 13F Portfolio: 2.84%
Number of Hedge Fund Holders: 17
First Foundation Inc. (NASDAQ:FFWM) is among the 10 stocks to buy according to Fred Cummings’ Elizabeth Park Capital. The firm has been holding a stake in First Foundation Inc. (NASDAQ:FFWM) since the second quarter of 2020. The strategy of buying First Foundation’s shares during the pandemic year certainly paid off for the firm. The shares of First Foundation Inc. (NASDAQ:FFWM) are up around 22% over the past twelve months.
Like QCR Holdings, Inc. (NASDAQ:QCRH) and Homestreet, Inc. (NASDAQ:HMST), the dividend factor also makes First Foundation Inc. (NASDAQ:FFWM) a good stock to hold for the long term. The bank offers a dividend yield of 1.67%.
First Foundation Inc (NASDAQ:FFWM) has seen an increase in hedge fund sentiment of late. First Foundation Inc (NASDAQ:FFWM) was in 17 hedge funds’ portfolios at the end of the third quarter of 2021.
7. ConnectOne Bancorp, Inc. (NASDAQ:CNOB)
Elizabeth Park Capital’s Stake Value: $8.6 million
Percentage of Elizabeth Park Capital’s 13F Portfolio: 3.04%
Number of Hedge Fund Holders: 9
ConnectOne Bancorp, Inc. (NASDAQ:CNOB) is also the long-running stock holding of Fred Cummings’ Elizabeth Park Capital. The firm has been holding a stake in the company since the end of 2016. ConnectOne Bancorp, Inc. (NASDAQ:CNOB) is a good stock to buy both for value and dividend investors.
Shares of ConnectOne Bancorp, Inc. (NASDAQ:CNOB) appreciated 44% in the last twelve months. Despite robust share price appreciation, ConnectOne Bancorp, Inc. (NASDAQ:CNOB) offers a decent dividend yield of 1.59%. ConnectOne Bancorp, Inc. (NASDAQ:CNOB) also looks well-positioned to support returns. The company posted a net income of $31.3 million for the fourth quarter of 2021, up from $25.6 million in the past year period.
ConnectOne Bancorp Inc (NASDAQ:CNOB) has experienced a decrease in activity from the world’s largest hedge funds lately. ConnectOne Bancorp Inc (NASDAQ:CNOB) was in 9 hedge funds’ portfolios at the end of September.
6. International Bancshares Corporation (NASDAQ:IBOC)
Elizabeth Park Capital’s Stake Value: $8.7 million
Percentage of Elizabeth Park Capital’s 13F Portfolio: 3.07%
Number of Hedge Fund Holders: 23
Elizabeth Park Capital is bullish on the future fundamentals of International Bancshares Corporation (NASDAQ:IBOC). The firm lifted its existing stake in the company by 12% during the September quarter. Shares of International Bancshares Corporation (NASDAQ:IBOC) underperformed compared to Elizabeth Park Capital’s top holdings like QCR Holdings, Inc. (NASDAQ:QCRH) and Homestreet, Inc. (NASDAQ:HMST). However, it offers a strong dividend yield compared to its competitors. International Bancshares Corporation (NASDAQ:IBOC) offers a quarterly dividend of $0.30 per share, yielding around 2.8%.
The number of long hedge fund bets increased by 5 recently. International Bancshares Corporation (NASDAQ:IBOC) was in 23 hedge funds’ portfolios at the end of the third quarter of 2021. Bernard Horn’s Polaris Capital Management and Allon Hellmann’s Full18 Capital are the leading stakeholders in the company.
5. Premier Financial Corp (NASDAQ:OHIO)
Elizabeth Park Capital’s Stake Value: $8.75 million
Percentage of Elizabeth Park Capital’s 13F Portfolio: 3.08%
Number of Hedge Fund Holders: 13
Premier Financial Corp. (NASDAQ:PFC) was in 13 hedge funds’ portfolios at the end of September. Jim Simons’ Renaissance Technologies was the leading stakeholder in the company.
4. PacWest Bancorp (NASDAQ:PACW)
Elizabeth Park Capital’s Stake Value: $9 million
Percentage of Elizabeth Park Capital’s 13F Portfolio: 3.18%
Number of Hedge Fund Holders: 33
PacWest Bancorp (NASDAQ:PACW) is among the 10 stocks to buy according to Fred Cummings’ Elizabeth Park Capital. Its shares rallied more than 40% in the last twelve months, thanks to improving financial numbers and market fundamentals. PacWest Bancorp is also a good dividend stock with a dividend yield of 2%. The company posted earnings per share of $5.05 in fiscal 2021 compared to a loss of $10.6 per share in the past year.
PacWest Bancorp (NASDAQ:PACW) was in 33 hedge funds’ portfolios at the end of the third quarter of 2021.
3. Western Alliance Bancorporation (NYSE:WAL)
Elizabeth Park Capital’s Stake Value: $10.6 million
Percentage of Elizabeth Park Capital’s 13F Portfolio: 3.73%
Number of Hedge Fund Holders: 29
Western Alliance Bancorporation (NYSE:WAL) is a member of Fred Cummings’ Elizabeth Park Capital since the first quarter of 2020. It is a good stock to buy and hold for the long term amid its steady share price gains and increasing dividends. The company’s stock price is up more than 20% in the past twelve months while the dividend yield is hovering at 1.44%.
Western Alliance Bancorporation (NYSE:WAL) was in 29 hedge funds’ portfolios at the end of the third quarter of 2021. John Murphy’s Levin Easterly Partners was the leading stakeholder in the company.
2. Homestreet, Inc. (NASDAQ:HMST)
Elizabeth Park Capital’s Stake Value: $10.8 million
Percentage of Elizabeth Park Capital’s 13F Portfolio: 3.83%
Number of Hedge Fund Holders: 11
Homestreet, Inc. (NASDAQ:HMST) is one of the favorite stocks holdings of Elizabeth Park Capital. As of September, it was the second-largest stock holding in Elizabeth Park’s 13F portfolio. The financial services company has successfully gained popular hedge funds’ confidence over the years. Jim Simons’ Renaissance Technologies and Ken Fisher’s Fisher Asset Management were the leading stakeholders in the company.
According to data tracked by Insider Monkey, HomeStreet Inc was in 11 hedge funds’ portfolios at the end of the third quarter of 2021.
1. QCR Holdings, Inc. (NASDAQ:QCRH)
Elizabeth Park Capital’s Stake Value: $13.4 million
Percentage of Elizabeth Park Capital’s 13F Portfolio: 4.73%
Number of Hedge Fund Holders: 14
QCR Holdings, Inc. (NASDAQ:QCRH) is the largest stock holding of Fred Cummings’ Elizabeth Park Capital’s 13F portfolio as of September 2021. The firm has been holding a stake in the company since the second quarter of 2015. Shares of QCR Holdings surged more than 40% in the last twelve months due to strong financial performance and broader market trends.
As of the end of September, the number of long hedge fund positions was standing at 14. Jim Simons’ Renaissance Technologies was the leading stakeholder in the company.
You can also take a look at the 10 Best Dividend Stocks According to Billionaire Larry Robbins’ Glenview Capital and Bill Ackman’s Pershing Square Portfolio: Top 6 Stock Picks.
Follow Insider Monkey on Twitter
Suggested articles:
- 10 Best Dividend Stocks According to Billionaire Larry Robbins’ Glenview Capital
- Bill Ackman’s Pershing Square Portfolio: Top 6 Stock Picks
- 10 Best Stocks under $10 in 2022
Disclosure: None. 10 Stocks to Buy According to Fred Cummings’ Elizabeth Park Capital is originally published on Insider Monkey.
