Do Hedge Funds Love Flushing Financial Corporation (FFIC)?

At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.

Flushing Financial Corporation (NASDAQ:FFIC) was in 8 hedge funds’ portfolios at the end of September. Flushing Financial Corporation (NASDAQ:FFIC) has experienced an increase in support from the world’s most elite money managers in recent months, although it is difficult to ascertain a reason for the same, considering that its stock was up only 1.35% during the third quarter. There were 7 hedge funds in our database with FFIC holdings at the end of the previous quarter. We decided to cover hedge funds that held positions in Flushing Financial Corporation during the third 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 M/I Homes Inc (NYSE:MHO), Blueprint Medicines Corp (NASDAQ:BPMC), and Silver Bay Realty Trust Corp (NYSE:SBY) to gather more data points.

If you’d ask most market participants, hedge funds are viewed as underperforming, outdated financial tools of the past. While there are over 8000 funds in operation at present, We choose to focus on the aristocrats of this club, approximately 700 funds. It is estimated that this group of investors oversees the majority of the hedge fund industry’s total capital, and by tracking their highest performing stock picks, Insider Monkey has spotted a number of investment strategies that have historically outrun Mr. Market. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points annually for a decade in their back tests.

Keeping this in mind, we’re going to take a glance at the key action surrounding Flushing Financial Corporation (NASDAQ:FFIC).

What have hedge funds been doing with Flushing Financial Corporation (NASDAQ:FFIC)?

At the end of the third quarter, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 14% from the second quarter. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, GAMCO Investors, managed by Mario Gabelli, holds the most valuable position in Flushing Financial Corporation (NASDAQ:FFIC). GAMCO Investors has a $20.2 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Renaissance Technologies, with a $5.2 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Remaining peers with similar optimism encompass Ken Gray and Steve Walsh’s Bryn Mawr Capital, Paul Hondros’ AlphaOne Capital Partners, and Ken Griffin’s Citadel Investment Group.

As one would reasonably expect, some big names have been driving this bullishness. AlphaOne Capital Partners created the largest position in Flushing Financial Corporation (NASDAQ:FFIC). AlphaOne Capital Partners had $2.2 million invested in the company at the end of the quarter. Citadel Investment Group also initiated a $0.6 million position during the quarter. The other funds with brand new Flushing Financial Corporation (NASDAQ:FFIC) positions are Israel Englander’s Millennium Management and John Overdeck and David Siegel’s Two Sigma Advisors.

Let’s also examine hedge fund activity in other stocks similar to Flushing Financial Corporation (NASDAQ:FFIC). We will take a look at M/I Homes Inc (NYSE:MHO), Blueprint Medicines Corp (NASDAQ:BPMC), Silver Bay Realty Trust Corp (NYSE:SBY), and MakeMyTrip Limited (NASDAQ:MMYT). This group of stocks’ market caps are closest to Flushing Financial Corporation (NASDAQ:FFIC)’s market cap.

As you can see, these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $94 million. That figure was $32 million in Flushing Financial Corporation (NASDAQ:FFIC)’s case. M/I Homes Inc (NYSE:MHO) is the most popular stock in this table. On the other hand, Silver Bay Realty Trust Corp (NYSE:SBY) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks, Flushing Financial Corporation (NASDAQ:FFIC) is even less popular than Silver Bay Realty Trust Corp (NYSE:SBY). Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case, more research is warranted.