The worries about the election and the ongoing uncertainty about the path of interest-rate increases have been keeping investors on the sidelines. Of course, most hedge funds and other asset managers have been underperforming main stock market indices since the middle of 2015. Interestingly though, smaller-cap stocks registered their best performance relative to the large-capitalization stocks since the end of the June quarter, suggesting that this may be the best time to take a cue from their stock picks. In fact, the Russell 2000 Index gained more than 15% since the beginning of the third quarter, while the Standard and Poor’s 500 benchmark returned less than 6%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards First Connecticut Bancorp Inc (NASDAQ:FBNK).
First Connecticut Bancorp Inc (NASDAQ:FBNK) was in 7 hedge funds’ portfolios at the end of September. FBNK shareholders have witnessed a decrease in support from the world’s most successful money managers lately. There were 12 hedge funds in our database with FBNK holdings at the end of the previous quarter. At the end of this article we will also compare FBNK to other stocks including Gafisa SA (ADR) (NYSE:GFA), Silicon Graphics International Corp (NASDAQ:SGI), and LSI Industries, Inc. (NASDAQ:LYTS) 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.
How are hedge funds trading First Connecticut Bancorp Inc (NASDAQ:FBNK)?
At Q3’s end, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a fall of 42% from the second quarter of 2016. On the other hand, there were a total of 11 hedge funds with a bullish position in FBNK at the beginning of this year. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Emanuel J. Friedman’s EJF Capital has the most valuable position in First Connecticut Bancorp Inc (NASDAQ:FBNK), worth close to $9.7 million. Coming in second is Rutabaga Capital Management, led by Peter Schliemann, which holds a $7.6 million position; 1.5% of its 13F portfolio is allocated to the company. Remaining members of the smart money with similar optimism contain Jim Simons’ Renaissance Technologies, one of the largest hedge funds in the world, John D. Gillespie’s Prospector Partners and Bernard Horn’s Polaris Capital Management. 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-microcap stocks.
Seeing as First Connecticut Bancorp Inc (NASDAQ:FBNK) has encountered a decline in interest from the entirety of the hedge funds we track, it’s safe to say that there were a few money managers that slashed their full holdings heading into Q4. Interestingly, Anton Schutz’s Mendon Capital Advisors cashed in the largest investment of all the investors tracked by Insider Monkey, comprising about $2.4 million in stock, and Joshua Nash’s Ulysses Management was right behind this move, as the fund cut about $0.8 million worth of shares.
Let’s check out hedge fund activity in other stocks similar to First Connecticut Bancorp Inc (NASDAQ:FBNK). We will take a look at Gafisa SA (ADR) (NYSE:GFA), Silicon Graphics International Corp (NASDAQ:SGI), LSI Industries, Inc. (NASDAQ:LYTS), and Trecora Resources (NYSE:TREC). All of these stocks’ market caps are closest to FBNK’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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 $28 million. That figure was $25 million in FBNK’s case. Silicon Graphics International Corp (NASDAQ:SGI) is the most popular stock in this table. On the other hand Gafisa SA (ADR) (NYSE:GFA) is the least popular one with only 3 bullish hedge fund positions. First Connecticut Bancorp Inc (NASDAQ:FBNK) 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. In this regard SGI might be a better candidate to consider taking a long position in.