In this article we will check out the progression of hedge fund sentiment towards First Savings Financial Group, Inc. (NASDAQ:FSFG) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Is First Savings Financial Group, Inc. (NASDAQ:FSFG) ready to rally soon? The best stock pickers are becoming less confident. The number of long hedge fund positions went down by 2 lately. Our calculations also showed that FSFG 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). FSFG was in 4 hedge funds’ portfolios at the end of March. There were 6 hedge funds in our database with FSFG positions at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 51 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
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 take a look at the key hedge fund action surrounding First Savings Financial Group, Inc. (NASDAQ:FSFG).
How have hedgies been trading First Savings Financial Group, Inc. (NASDAQ:FSFG)?
At Q1’s end, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of -33% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards FSFG over the last 18 quarters. 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, EJF Capital, managed by Emanuel J. Friedman, holds the most valuable position in First Savings Financial Group, Inc. (NASDAQ:FSFG). EJF Capital has a $1.7 million position in the stock, comprising 0.4% of its 13F portfolio. On EJF Capital’s heels is Fourthstone LLC, led by Phil Stone, holding a $1.6 million position; 1.5% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors with similar optimism consist of Renaissance Technologies, Israel Englander’s Millennium Management and . In terms of the portfolio weights assigned to each position Fourthstone LLC allocated the biggest weight to First Savings Financial Group, Inc. (NASDAQ:FSFG), around 1.49% of its 13F portfolio. EJF Capital is also relatively very bullish on the stock, designating 0.35 percent of its 13F equity portfolio to FSFG.
Due to the fact that First Savings Financial Group, Inc. (NASDAQ:FSFG) has witnessed a decline in interest from the aggregate hedge fund industry, logic holds that there was a specific group of money managers that decided to sell off their entire stakes last quarter. Interestingly, Donald Sussman’s Paloma Partners cut the biggest investment of the 750 funds monitored by Insider Monkey, totaling an estimated $0.3 million in stock. Michael Gelband’s fund, ExodusPoint Capital, also said goodbye to its stock, about $0.3 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 2 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks similar to First Savings Financial Group, Inc. (NASDAQ:FSFG). These stocks are PlayAGS, Inc. (NYSE:AGS), CorMedix Inc. (NYSE:CRMD), Titan International Inc (NYSE:TWI), and Asure Software Inc (NASDAQ:ASUR). This group of stocks’ market caps match FSFG’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $15 million. That figure was $5 million in FSFG’s case. PlayAGS, Inc. (NYSE:AGS) is the most popular stock in this table. On the other hand CorMedix Inc. (NYSE:CRMD) is the least popular one with only 3 bullish hedge fund positions. First Savings Financial Group, Inc. (NASDAQ:FSFG) 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 FSFG wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); FSFG investors were disappointed as the stock returned 5.3% 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.
Disclosure: None. This article was originally published at Insider Monkey.