Hedge Funds Cashing Out Of MSB Financial Corp. (MSBF)?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of MSB Financial Corp. (NASDAQ:MSBF).

MSB Financial Corp. (NASDAQ:MSBF) has experienced a decrease in hedge fund sentiment of late. Our calculations also showed that MSBF 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.

In today’s marketplace there are numerous methods market participants put to use to value publicly traded companies. A couple of the most innovative methods are hedge fund and insider trading moves. We have shown that, historically, those who follow the top picks of the best money managers can outperform the market by a very impressive margin (see the details here).


Paul Tudor Jones of Tudor Investment Corp

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 stocks recommended/scorned by legendary Bill Miller. 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. With all of this in mind we’re going to take a look at the recent hedge fund action regarding MSB Financial Corp. (NASDAQ:MSBF).

What have hedge funds been doing with MSB Financial Corp. (NASDAQ:MSBF)?

Heading into the second quarter of 2020, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -14% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in MSBF over the last 18 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is MSBF A Good Stock To Buy?

More specifically, Seidman Investment Partnership was the largest shareholder of MSB Financial Corp. (NASDAQ:MSBF), with a stake worth $7.1 million reported as of the end of September. Trailing Seidman Investment Partnership was Tudor Investment Corp, which amassed a stake valued at $3.8 million. Renaissance Technologies, Beryl Capital Management, and MFP Investors 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 Seidman Investment Partnership allocated the biggest weight to MSB Financial Corp. (NASDAQ:MSBF), around 8.71% of its 13F portfolio. Tudor Investment Corp is also relatively very bullish on the stock, dishing out 0.34 percent of its 13F equity portfolio to MSBF.

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Springbok Capital. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because none of the 750+ hedge funds tracked by Insider Monkey identified MSBF as a viable investment and initiated a position in the stock.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as MSB Financial Corp. (NASDAQ:MSBF) but similarly valued. These stocks are China Jo Jo Drugstores Inc (NASDAQ:CJJD), Identiv, Inc. (NASDAQ:INVE), InnerWorkings, Inc. (NASDAQ:INWK), and United Bancshares Inc. OH (NASDAQ:UBOH). This group of stocks’ market values resemble MSBF’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CJJD 3 10594 -2
INVE 2 4026 -1
INWK 11 7969 0
UBOH 1 4756 0
Average 4.25 6836 -0.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 4.25 hedge funds with bullish positions and the average amount invested in these stocks was $7 million. That figure was $14 million in MSBF’s case. InnerWorkings, Inc. (NASDAQ:INWK) is the most popular stock in this table. On the other hand United Bancshares Inc. OH (NASDAQ:UBOH) is the least popular one with only 1 bullish hedge fund positions. MSB Financial Corp. (NASDAQ:MSBF) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 13.9% in 2020 through June 10th but beat the market by 14.2 percentage points. Unfortunately MSBF wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on MSBF were disappointed as the stock returned 6.1% during the same time period 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 many of these stocks already outperformed the market so far this year.

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