Hedge Fund Sentiment Is Stagnant On BancorpSouth Bank (BXS)

The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards BancorpSouth Bank (NYSE:BXS).

BancorpSouth Bank (NYSE:BXS) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 12 hedge funds’ portfolios at the end of September. At the end of this article we will also compare BXS to other stocks including Houlihan Lokey Inc (NYSE:HLI), Strategic Education, Inc. (NASDAQ:STRA), and Nextera Energy Partners LP (NYSE:NEP) to get a better sense of its popularity.
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Dmitry Balyasny of Balyasny Asset Managemnet

Dmitry Balyasny of Balyasny Asset Managemnet

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What have hedge funds been doing with BancorpSouth Bank (NYSE:BXS)?

At Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards BXS over the last 17 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).

Among these funds, Fisher Asset Management held the most valuable stake in BancorpSouth Bank (NYSE:BXS), which was worth $30.1 million at the end of the third quarter. On the second spot was Balyasny Asset Management which amassed $19.1 million worth of shares. Millennium Management, RR Partners, and Interval Partners were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position RR Partners allocated the biggest weight to BancorpSouth Bank (NYSE:BXS), around 0.63% of its 13F portfolio. Interval Partners is also relatively very bullish on the stock, setting aside 0.21 percent of its 13F equity portfolio to BXS.

Since BancorpSouth Bank (NYSE:BXS) has faced declining sentiment from the smart money, it’s easy to see that there exists a select few fund managers who were dropping their entire stakes last quarter. Interestingly, Renaissance Technologies cut the biggest stake of all the hedgies monitored by Insider Monkey, totaling close to $0.5 million in stock, and Benjamin A. Smith’s Laurion Capital Management was right behind this move, as the fund cut about $0.4 million worth. These transactions are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as BancorpSouth Bank (NYSE:BXS) but similarly valued. We will take a look at Houlihan Lokey Inc (NYSE:HLI), Strategic Education, Inc. (NASDAQ:STRA), Nextera Energy Partners LP (NYSE:NEP), and Qualys Inc (NASDAQ:QLYS). This group of stocks’ market valuations are closest to BXS’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HLI 14 136860 -1
STRA 19 213625 6
NEP 15 66400 2
QLYS 17 113053 0
Average 16.25 132485 1.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 16.25 hedge funds with bullish positions and the average amount invested in these stocks was $132 million. That figure was $82 million in BXS’s case. Strategic Education, Inc. (NASDAQ:STRA) is the most popular stock in this table. On the other hand Houlihan Lokey Inc (NYSE:HLI) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks BancorpSouth Bank (NYSE:BXS) is even less popular than HLI. Hedge funds dodged a bullet by taking a bearish stance towards BXS. Our calculations showed that the top 20 most popular hedge fund stocks returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately BXS wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); BXS investors were disappointed as the stock returned 5% during the fourth quarter (through the end of November) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market so far in Q4.

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