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Hedge Funds Nibbling On Peoples Utah Bancorp (PUB)

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 Peoples Utah Bancorp (NASDAQ:PUB).

Peoples Utah Bancorp (NASDAQ:PUB) was in 7 hedge funds’ portfolios at the end of March. PUB has seen an increase in enthusiasm from smart money recently. There were 6 hedge funds in our database with PUB positions at the end of the previous quarter. Our calculations also showed that PUB 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.

David Harding

David Harding of Winton Capital Management

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. Keeping this in mind we’re going to review the latest hedge fund action regarding Peoples Utah Bancorp (NASDAQ:PUB).

What does smart money think about Peoples Utah Bancorp (NASDAQ:PUB)?

At Q1’s end, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in PUB over the last 18 quarters. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).

More specifically, Forest Hill Capital was the largest shareholder of Peoples Utah Bancorp (NASDAQ:PUB), with a stake worth $6.7 million reported as of the end of September. Trailing Forest Hill Capital was Renaissance Technologies, which amassed a stake valued at $4.5 million. Winton Capital Management, Citadel Investment Group, and Fourthstone LLC 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 Forest Hill Capital allocated the biggest weight to Peoples Utah Bancorp (NASDAQ:PUB), around 3.59% of its 13F portfolio. Zebra Capital Management is also relatively very bullish on the stock, designating 0.35 percent of its 13F equity portfolio to PUB.

Now, specific money managers were breaking ground themselves. Citadel Investment Group, managed by Ken Griffin, initiated the largest position in Peoples Utah Bancorp (NASDAQ:PUB). Citadel Investment Group had $0.4 million invested in the company at the end of the quarter. Phil Stone’s Fourthstone LLC also initiated a $0.3 million position during the quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Peoples Utah Bancorp (NASDAQ:PUB) but similarly valued. We will take a look at BioDelivery Sciences International, Inc. (NASDAQ:BDSI), Extreme Networks, Inc (NASDAQ:EXTR), Global Indemnity Limited (NASDAQ:GBLI), and Seneca Foods Corp (NASDAQ:SENEA). This group of stocks’ market caps match PUB’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BDSI 27 102794 2
EXTR 16 48943 -1
GBLI 4 25028 -2
SENEA 7 25303 0
Average 13.5 50517 -0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.5 hedge funds with bullish positions and the average amount invested in these stocks was $51 million. That figure was $13 million in PUB’s case. BioDelivery Sciences International, Inc. (NASDAQ:BDSI) is the most popular stock in this table. On the other hand Global Indemnity Limited (NASDAQ:GBLI) is the least popular one with only 4 bullish hedge fund positions. Peoples Utah Bancorp (NASDAQ:PUB) 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. 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 and surpassed the market by 14.2 percentage points. Unfortunately PUB wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); PUB investors were disappointed as the stock returned 21.7% during the second quarter 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.