Hedge Funds Have Never Been This Bullish On CBM Bancorp, Inc. (CBMB)

“Since 2006, value stocks (IVE vs IVW) have underperformed 11 of the 13 calendar years and when they beat growth, it wasn’t by much. Cumulatively, through this week, it has been a 122% differential (up 52% for value vs up 174% for growth). This appears to be the longest and most severe drought for value investors since data collection began. It will go our way eventually as there are too many people paying far too much for today’s darlings, both public and private. Further, the ten-year yield of 2.5% (pre-tax) isn’t attractive nor is real estate. We believe the value part of the global equity market is the only place to earn solid risk adjusted returns and we believe those returns will be higher than normal,” said Vilas Fund in its Q1 investor letter. We aren’t sure whether value stocks outperform growth, but we follow hedge fund investor letters to understand where the markets and stocks might be going. This article will lay out and discuss the hedge fund and institutional investor sentiment towards CBM Bancorp, Inc. (NASDAQ:CBMB).

CBM Bancorp, Inc. (NASDAQ:CBMB) shareholders have witnessed an increase in hedge fund sentiment of late. CBMB was in 4 hedge funds’ portfolios at the end of September. There were 3 hedge funds in our database with CBMB holdings at the end of the previous quarter. Our calculations also showed that CBMB isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

In the financial world there are a lot of metrics market participants put to use to evaluate their holdings. A pair of the most under-the-radar metrics are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the top picks of the top investment managers can outpace the broader indices by a very impressive margin (see the details here).

Michael Price MFP Investors

Michael Price of MFP Investors

We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock already gained 20 percent. With all of this in mind we’re going to review the recent hedge fund action surrounding CBM Bancorp, Inc. (NASDAQ:CBMB).

What have hedge funds been doing with CBM Bancorp, Inc. (NASDAQ:CBMB)?

Heading into the fourth quarter of 2019, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 33% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CBMB over the last 17 quarters. 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, Lawrence Seidman’s Seidman Investment Partnership has the number one position in CBM Bancorp, Inc. (NASDAQ:CBMB), worth close to $1.4 million, amounting to 1.3% of its total 13F portfolio. On Seidman Investment Partnership’s heels is Millennium Management, managed by Israel Englander, which holds a $0.7 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining peers that hold long positions comprise Michael Price’s MFP Investors, Renaissance Technologies. In terms of the portfolio weights assigned to each position Seidman Investment Partnership allocated the biggest weight to CBM Bancorp, Inc. (NASDAQ:CBMB), around 1.27% of its 13F portfolio. MFP Investors is also relatively very bullish on the stock, designating 0.05 percent of its 13F equity portfolio to CBMB.

As aggregate interest increased, key money managers have been driving this bullishness. Renaissance Technologies established the biggest position in CBM Bancorp, Inc. (NASDAQ:CBMB). Renaissance Technologies had $0.2 million invested in the company at the end of the quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as CBM Bancorp, Inc. (NASDAQ:CBMB) but similarly valued. These stocks are Performant Financial Corporation (NASDAQ:PFMT), Infinity Pharmaceuticals Inc. (NASDAQ:INFI), SCYNEXIS Inc (NASDAQ:SCYX), and NewLink Genetics Corporation (NASDAQ:NLNK). This group of stocks’ market values are closest to CBMB’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PFMT 5 13020 2
INFI 6 20917 0
SCYX 6 2467 2
NLNK 6 6218 1
Average 5.75 10656 1.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 5.75 hedge funds with bullish positions and the average amount invested in these stocks was $11 million. That figure was $3 million in CBMB’s case. Infinity Pharmaceuticals Inc. (NASDAQ:INFI) is the most popular stock in this table. On the other hand Performant Financial Corporation (NASDAQ:PFMT) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks CBM Bancorp, Inc. (NASDAQ:CBMB) is even less popular than PFMT. Hedge funds dodged a bullet by taking a bearish stance towards CBMB. Our calculations showed that the top 20 most popular hedge fund stocks returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately CBMB wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); CBMB investors were disappointed as the stock returned 0.1% during the fourth quarter (through the end of November) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market so far in Q4.

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