Hedge Funds Are Crazy About Bridge Bancorp, Inc. (BDGE)

It seems that the masses and most of the financial media hate hedge funds and what they do, but why is this hatred of hedge funds so prominent? At the end of the day, these asset management firms do not gamble the hard-earned money of the people who are on the edge of poverty. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. The S&P 500 Index gained 7.6% in the 12 month-period that ended November 21, while less than 49% of its stocks beat the benchmark. In contrast, the 30 most popular mid-cap stocks among the top hedge fund investors tracked by the Insider Monkey team returned 18% over the same period, which provides evidence that these money managers do have great stock picking abilities. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Bridge Bancorp, Inc. (NASDAQ:BDGE).

Bridge Bancorp, Inc. (NASDAQ:BDGE) was in 7 hedge funds’ portfolios at the end of September. BDGE has seen an increase in hedge fund interest lately. There were 6 hedge funds in our database with BDGE positions 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 OceanFirst Financial Corp. (NASDAQ:OCFC), Universal American Corporation (NYSE:UAM), and Sequential Brands Group Inc (NASDAQ:SQBG) to gather more data points.

We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.

What does the smart money think about Bridge Bancorp, Inc. (NASDAQ:BDGE)?

At Q3’s end, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, up by 17% from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards BDGE over the last 5 quarters. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Basswood Capital, led by Matthew Lindenbaum, holds the biggest position in Bridge Bancorp, Inc. (NASDAQ:BDGE). Basswood Capital has a $46 million position in the stock, comprising 2.2% of its 13F portfolio. Coming in second is Joshua Nash of Ulysses Management, with a $13.2 million position; 1.5% of its 13F portfolio is allocated to the company. Remaining members of the smart money that are bullish include Millennium Management, one of the 10 largest hedge funds in the world, John Overdeck, and David Siegel’s Two Sigma Advisors. We should note that Ulysses Management is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

With a general bullishness amongst the heavyweights, some big names have jumped into Bridge Bancorp, Inc. (NASDAQ:BDGE) headfirst. Millennium Management initiated the most outsized position in Bridge Bancorp, Inc. (NASDAQ:BDGE). Millennium Management had $0.8 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0.6 million position during the quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Bridge Bancorp, Inc. (NASDAQ:BDGE) but similarly valued. We will take a look at OceanFirst Financial Corp. (NASDAQ:OCFC), Universal American Corporation (NYSE:UAM), Sequential Brands Group Inc (NASDAQ:SQBG), and Entercom Communications Corp. (NYSE:ETM). All of these stocks’ market caps are closest to BDGE’s market cap.

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $72 million. That figure was $66 million in BDGE’s case. OceanFirst Financial Corp. (NASDAQ:OCFC) is the most popular stock in this table. On the other hand Entercom Communications Corp. (NYSE:ETM) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Bridge Bancorp, Inc. (NASDAQ:BDGE) is even less popular than ETM. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

Disclosure: None