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BankFinancial Corporation (BFIN): Hedge Funds Watching Cautiously

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of BankFinancial Corporation (NASDAQ:BFIN).

BankFinancial Corporation (NASDAQ:BFIN) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 4 hedge funds’ portfolios at the end of the first quarter of 2020. 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 Luokung Technology Corp (NASDAQ:LKCO), U.S. Silica Holdings Inc (NYSE:SLCA), and OptimizeRx Corporation (NASDAQ:OPRX) to gather more data points. Our calculations also showed that BFIN isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

In the 21st century investor’s toolkit there are dozens of indicators stock market investors employ to evaluate their holdings. Some of the most under-the-radar indicators are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the best picks of the best hedge fund managers can trounce the S&P 500 by a solid margin (see the details here).

Ken Griffin

Ken Griffin of Citadel Investment Group

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to analyze the fresh hedge fund action regarding BankFinancial Corporation (NASDAQ:BFIN).

How have hedgies been trading BankFinancial Corporation (NASDAQ:BFIN)?

At Q1’s end, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards BFIN over the last 18 quarters. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Renaissance Technologies has the biggest position in BankFinancial Corporation (NASDAQ:BFIN), worth close to $9.2 million, comprising less than 0.1%% of its total 13F portfolio. Coming in second is Winton Capital Management, managed by David Harding, which holds a $0.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish include John Overdeck and David Siegel’s Two Sigma Advisors, Ken Griffin’s Citadel Investment Group and . In terms of the portfolio weights assigned to each position Renaissance Technologies allocated the biggest weight to BankFinancial Corporation (NASDAQ:BFIN), around 0.01% of its 13F portfolio. Winton Capital Management is also relatively very bullish on the stock, dishing out 0.01 percent of its 13F equity portfolio to BFIN.

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Millennium Management. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Citadel Investment Group).

Let’s now take a look at hedge fund activity in other stocks similar to BankFinancial Corporation (NASDAQ:BFIN). We will take a look at Luokung Technology Corp (NASDAQ:LKCO), U.S. Silica Holdings Inc (NYSE:SLCA), OptimizeRx Corporation (NASDAQ:OPRX), and Capital Product Partners L.P. (NASDAQ:CPLP). All of these stocks’ market caps are similar to BFIN’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
LKCO 1 206 -1
SLCA 12 33061 -4
OPRX 4 16355 -2
CPLP 4 2212 1
Average 5.25 12959 -1.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 5.25 hedge funds with bullish positions and the average amount invested in these stocks was $13 million. That figure was $10 million in BFIN’s case. U.S. Silica Holdings Inc (NYSE:SLCA) is the most popular stock in this table. On the other hand Luokung Technology Corp (NASDAQ:LKCO) is the least popular one with only 1 bullish hedge fund positions. BankFinancial Corporation (NASDAQ:BFIN) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May and surpassed the market by 13.2 percentage points. Unfortunately BFIN wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); BFIN investors were disappointed as the stock returned 4.3% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.

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Disclosure: None. This article was originally published at Insider Monkey.