Looking for high-potential stocks? Just follow the big players within the hedge fund industry. Why should you do so? Let’s take a brief look at what statistics have to say about hedge funds’ stock picking abilities to illustrate. The Standard and Poor’s 500 Index returned approximately 7.6% in the 12 months ending November 21, with more than 51% of the stocks in the index failing to beat the benchmark. Therefore, the odds that one will pin down a winner by randomly picking a stock are less than the odds in a fair coin-tossing game. Conversely, best performing hedge funds’ 30 preferred mid-cap stocks generated a return of 18% during the same 12-month period. Coincidence? It might happen to be so, but it is unlikely. Our research covering a 17-year period indicates that hedge funds’ stock picks generate superior risk-adjusted returns. That’s why we believe it is wise to check hedge fund activity before you invest your time or your savings on a stock like Equity BancShares Inc (NASDAQ:EQBK).
Equity BancShares Inc (NASDAQ:EQBK) shares didn’t see a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 6 hedge funds’ portfolios at the end of September, same as at the end of June. At the end of this article we will also compare EQBK to other stocks including MCBC Holdings Inc (NASDAQ:MCFT), Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD), and Vishay Precision Group Inc (NYSE:VPG) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
What have hedge funds been doing with Equity BancShares Inc (NASDAQ:EQBK)?
At Q3’s end, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, unchanged from the second quarter of 2016. The graph below displays the number of hedge funds with bullish position in EQBK over the last 5 quarters, which peaked at the end of 2015 and has yet to return to that level in 2016. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Endicott Management, led by Robert I. Usdan and Wayne K. Goldstein, holds the largest position in Equity BancShares Inc (NASDAQ:EQBK). Endicott Management has a $12.2 million position in the stock, comprising 5.5% of its 13F portfolio. Coming in second is Emanuel J. Friedman of EJF Capital, with a $10.5 million position. Other hedge funds and institutional investors that are bullish include Matthew Lindenbaum’s Basswood Capital, Paul Magidson, Jonathan Cohen and Ostrom Enders’ Castine Capital Management, and 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-micro-cap stocks.