The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 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 June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought New York Community Bancorp, Inc. (NYSE:NYCB) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
New York Community Bancorp, Inc. (NYSE:NYCB) investors should be aware of an increase in activity from the world’s largest hedge funds lately. New York Community Bancorp, Inc. (NYSE:NYCB) was in 28 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 27. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 22 hedge funds in our database with NYCB holdings at the end of March. Our calculations also showed that NYCB isn’t among the 30 most popular stocks among hedge funds (click for Q2 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 the financial world there are dozens of formulas stock traders put to use to size up stocks. A pair of the most under-the-radar formulas are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the best picks of the best money managers can trounce the market by a solid margin (see the details here).
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website to get excerpts of these letters in your inbox. Keeping this in mind let’s take a look at the fresh hedge fund action encompassing New York Community Bancorp, Inc. (NYSE:NYCB).
Hedge fund activity in New York Community Bancorp, Inc. (NYSE:NYCB)
At the end of the second quarter, a total of 28 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 27% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards NYCB over the last 20 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in New York Community Bancorp, Inc. (NYSE:NYCB) was held by Citadel Investment Group, which reported holding $82.7 million worth of stock at the end of September. It was followed by Kahn Brothers with a $52.5 million position. Other investors bullish on the company included Adage Capital Management, Renaissance Technologies, and Winton Capital Management. In terms of the portfolio weights assigned to each position Kahn Brothers allocated the biggest weight to New York Community Bancorp, Inc. (NYSE:NYCB), around 8.87% of its 13F portfolio. Cerebellum Capital is also relatively very bullish on the stock, dishing out 2.36 percent of its 13F equity portfolio to NYCB.
With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Azora Capital, managed by Ravi Chopra, initiated the most valuable position in New York Community Bancorp, Inc. (NYSE:NYCB). Azora Capital had $6 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also made a $4.3 million investment in the stock during the quarter. The following funds were also among the new NYCB investors: Steve Cohen’s Point72 Asset Management, David Andre and Astro Teller’s Cerebellum Capital, and Israel Englander’s Millennium Management.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as New York Community Bancorp, Inc. (NYSE:NYCB) but similarly valued. These stocks are Flowers Foods, Inc. (NYSE:FLO), Nutanix, Inc. (NASDAQ:NTNX), HollyFrontier Corporation (NYSE:HFC), CRISPR Therapeutics AG (NASDAQ:CRSP), The Gap Inc. (NYSE:GPS), ServiceMaster Global Holdings Inc (NYSE:SERV), and Primerica, Inc. (NYSE:PRI). This group of stocks’ market valuations resemble NYCB’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 28.6 hedge funds with bullish positions and the average amount invested in these stocks was $428 million. That figure was $221 million in NYCB’s case. The Gap Inc. (NYSE:GPS) is the most popular stock in this table. On the other hand Nutanix, Inc. (NASDAQ:NTNX) is the least popular one with only 20 bullish hedge fund positions. New York Community Bancorp, Inc. (NYSE:NYCB) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for NYCB is 62.2. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and 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 21.3% in 2020 through September 25th and surpassed the market by 17.7 percentage points. Unfortunately NYCB wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); NYCB investors were disappointed as the stock returned -18% since Q2 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 in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.