Do Hedge Funds Love Seacoast Banking Corporation of Florida (SBCF)?

The market has been volatile as the Federal Reserve winds down its easy money policies. Small cap stocks have been hit hard as a result, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF (SPY) by more than 14 percentage points between June 25th and the end of October. SEC filings and hedge fund investor letters indicate that the smart money seems to be paring back their overall long exposure, and the funds’ movements is one of the reasons why the major indexes have retraced. In this article, we analyze what the smart money thinks of Seacoast Banking Corporation of Florida (NASDAQ:SBCF) and find out how it is affected by hedge funds’ moves.

Is Seacoast Banking Corporation of Florida (NASDAQ:SBCF) a good investment today? The best stock pickers are taking a bearish view. The number of long hedge fund bets went down by 1 lately. SBCF was in 12 hedge funds’ portfolios at the end of the third quarter of 2015. There were 13 hedge funds in our database with SBCF holdings 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 Shoe Carnival, Inc. (NASDAQ:SCVL), UTi Worldwide Inc. (NASDAQ:UTIW), and Star Gas Partners, L.P. (NYSE:SGU) to gather more data points.

If you’d ask most stock holders, hedge funds are viewed as unimportant, old financial vehicles of years past. While there are greater than 8000 funds in operation at present, Our experts hone in on the crème de la crème of this club, around 700 funds. These hedge fund managers preside over most of all hedge funds’ total asset base, and by following their finest equity investments, Insider Monkey has discovered a number of investment strategies that have historically outpaced the market. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points annually for a decade in their back tests.

With all of this in mind, let’s take a look at the recent action encompassing Seacoast Banking Corporation of Florida (NASDAQ:SBCF).

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

Heading into Q4, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -8% from the previous quarter. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Basswood Capital, managed by Matthew Lindenbaum, holds the largest position in Seacoast Banking Corporation of Florida (NASDAQ:SBCF). Basswood Capital has a $26.1 million position in the stock, comprising 1.3% of its 13F portfolio. On Basswood Capital’s heels is Private Capital Management, led by Gregg J. Powers, holding a $9.2 million position; 1.1% of its 13F portfolio is allocated to the company. Other members of the smart money that are bullish comprise Paul Magidson, Jonathan Cohen. And Ostrom Enders’ Castine Capital Management, Jim Simons’s Renaissance Technologies and Anton Schutz’s Mendon Capital Advisors.

Since Seacoast Banking Corporation of Florida (NASDAQ:SBCF) has witnessed bearish sentiment from hedge fund managers, it’s easy to see that there was a specific group of money managers that slashed their positions entirely heading into Q4. At the top of the heap, Porter Collins, Daniel Moses, and Vincent Daniel’s Seawolf Capital dumped the largest stake of all the hedgies watched by Insider Monkey, valued at close to $2.9 million in stock, and Louis Navellier’s Navellier & Associates was right behind this move, as the fund said goodbye to about $0.3 million worth. These transactions are interesting, as total hedge fund interest was cut by 1 funds heading into Q4.

Let’s now take a look at hedge fund activity in other stocks similar to Seacoast Banking Corporation of Florida (NASDAQ:SBCF). These stocks are Shoe Carnival, Inc. (NASDAQ:SCVL), UTi Worldwide Inc. (NASDAQ:UTIW), Star Gas Partners, L.P. (NYSE:SGU), and Cresud S.A.C.I.F. y A. (ADR) (NASDAQ:CRESY). This group of stocks’ market values match SBCF’s market value.

As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $96 million, compared to $59 million in SBCF’s case. UTi Worldwide Inc. (NASDAQ:UTIW) is the most popular stock in this table. On the other hand Star Gas Partners, L.P. (NYSE:SGU) is the least popular one with only 5 bullish hedge fund positions. Seacoast Banking Corporation of Florida (NASDAQ:SBCF) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard UTIW might be a better candidate to consider looking into.