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Hedge Funds Aren’t Crazy About Bridge Bancorp, Inc. (BDGE) Anymore

At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Bridge Bancorp, Inc. (NASDAQ:BDGE).

Bridge Bancorp, Inc. (NASDAQ:BDGE) investors should be aware of a decrease in enthusiasm from smart money in recent months. Our calculations also showed that BDGE 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).

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 58 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.

Matthew Lindenbaum Basswood Capital

Matthew Lindenbaum of Basswood Capital

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 trades like this one. 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. Keeping this in mind we’re going to take a gander at the key hedge fund action encompassing Bridge Bancorp, Inc. (NASDAQ:BDGE).

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

At the end of the first quarter, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a change of -30% from the previous quarter. The graph below displays the number of hedge funds with bullish position in BDGE over the last 18 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their holdings substantially (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Basswood Capital, managed by Matthew Lindenbaum, holds the number one position in Bridge Bancorp, Inc. (NASDAQ:BDGE). Basswood Capital has a $42.2 million position in the stock, comprising 4.9% of its 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, which holds a $8.6 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining professional money managers with similar optimism comprise Joshua Nash’s Ulysses Management, Ken Griffin’s Citadel Investment Group and John Overdeck and David Siegel’s Two Sigma Advisors. In terms of the portfolio weights assigned to each position Basswood Capital allocated the biggest weight to Bridge Bancorp, Inc. (NASDAQ:BDGE), around 4.93% of its 13F portfolio. Ulysses Management is also relatively very bullish on the stock, dishing out 1.61 percent of its 13F equity portfolio to BDGE.

Because Bridge Bancorp, Inc. (NASDAQ:BDGE) has experienced falling interest from the aggregate hedge fund industry, it’s easy to see that there lies a certain “tier” of funds that elected to cut their entire stakes by the end of the first quarter. It’s worth mentioning that D. E. Shaw’s D E Shaw dropped the largest stake of the 750 funds watched by Insider Monkey, totaling close to $0.9 million in stock. Peter Rathjens, Bruce Clarke and John Campbell’s fund, Arrowstreet Capital, also cut its stock, about $0.9 million worth. These moves are interesting, as total hedge fund interest was cut by 3 funds by the end of the first quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Bridge Bancorp, Inc. (NASDAQ:BDGE) but similarly valued. These stocks are Turning Point Brands, Inc. (NYSE:TPB), The Meet Group, Inc. (NASDAQ:MEET), QuinStreet Inc (NASDAQ:QNST), and G1 Therapeutics, Inc. (NASDAQ:GTHX). All of these stocks’ market caps resemble BDGE’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TPB 14 48228 -2
MEET 21 96815 6
QNST 22 93394 4
GTHX 13 25511 2
Average 17.5 65987 2.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 17.5 hedge funds with bullish positions and the average amount invested in these stocks was $66 million. That figure was $60 million in BDGE’s case. QuinStreet Inc (NASDAQ:QNST) is the most popular stock in this table. On the other hand G1 Therapeutics, Inc. (NASDAQ:GTHX) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Bridge Bancorp, Inc. (NASDAQ:BDGE) is even less popular than GTHX. Hedge funds dodged a bullet by taking a bearish stance towards BDGE. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th but managed to beat the market by 14.2 percentage points. Unfortunately BDGE wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); BDGE investors were disappointed as the stock returned 8.9% during the second quarter (through June 10th) 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 so far in 2020.

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