Hedge Funds Are Coming Back To First Bancorp (FBP)

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the second quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of First Bancorp (NYSE:FBP) based on that data and determine whether they were really smart about the stock.

First Bancorp (NYSE:FBP) investors should pay attention to an increase in support from the world’s most elite money managers lately. First Bancorp (NYSE:FBP) was in 26 hedge funds’ portfolios at the end of June. The all time high for this statistics is 32. There were 24 hedge funds in our database with FBP positions at the end of the first quarter. Our calculations also showed that FBP isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 56 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 34% through August 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Anton Schutz of Mendon Capital Advisors

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website to get excerpts of these letters in your inbox. Now let’s analyze the fresh hedge fund action surrounding First Bancorp (NYSE:FBP).

Hedge fund activity in First Bancorp (NYSE:FBP)

Heading into the third quarter of 2020, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 8% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards FBP over the last 20 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Steve Cohen’s Point72 Asset Management has the most valuable position in First Bancorp (NYSE:FBP), worth close to $32 million, corresponding to 0.2% of its total 13F portfolio. The second most bullish fund manager is Alyeska Investment Group, led by Anand Parekh, holding a $21.2 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Other peers that hold long positions encompass D. E. Shaw’s D E Shaw, John Overdeck and David Siegel’s Two Sigma Advisors and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. In terms of the portfolio weights assigned to each position Castine Capital Management allocated the biggest weight to First Bancorp (NYSE:FBP), around 5.62% of its 13F portfolio. Mendon Capital Advisors is also relatively very bullish on the stock, setting aside 1 percent of its 13F equity portfolio to FBP.

Now, some big names were breaking ground themselves. Castine Capital Management, managed by Paul Magidson, Jonathan Cohen. And Ostrom Enders, created the largest position in First Bancorp (NYSE:FBP). Castine Capital Management had $7.3 million invested in the company at the end of the quarter. Anton Schutz’s Mendon Capital Advisors also initiated a $2 million position during the quarter. The other funds with brand new FBP positions are Michael Gelband’s ExodusPoint Capital, Minhua Zhang’s Weld Capital Management, and Bruce Kovner’s Caxton Associates LP.

Let’s now review hedge fund activity in other stocks similar to First Bancorp (NYSE:FBP). These stocks are Mesoblast Limited (NASDAQ:MESO), AMC Networks Inc (NASDAQ:AMCX), Alamo Group, Inc. (NYSE:ALG), AdaptHealth Corp. (NASDAQ:AHCO), PC Connection, Inc. (NASDAQ:CNXN), Nantkwest Inc (NASDAQ:NK), and Gol Linhas Aereas Inteligentes SA (NYSE:GOL). All of these stocks’ market caps are similar to FBP’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MESO 3 1965 -1
AMCX 26 127165 3
ALG 10 157672 2
AHCO 12 97877 2
CNXN 8 42874 -2
NK 8 11774 4
GOL 10 37485 -1
Average 11 68116 1

View table here if you experience formatting issues.

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 $68 million. That figure was $117 million in FBP’s case. AMC Networks Inc (NASDAQ:AMCX) is the most popular stock in this table. On the other hand Mesoblast Limited (NASDAQ:MESO) is the least popular one with only 3 bullish hedge fund positions. First Bancorp (NYSE:FBP) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FBP is 81.4. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. 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 21.3% in 2020 through September 25th and still beat the market by 17.7 percentage points. Hedge funds were also right about betting on FBP as the stock returned 59.1% during Q3 (through September 25th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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