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Hedge Funds Watching Mid Penn Bancorp, Inc. (MPB) From Afar

In this article we will take a look at whether hedge funds think Mid Penn Bancorp, Inc. (NASDAQ:MPB) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.

Mid Penn Bancorp, Inc. (NASDAQ:MPB) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 4 hedge funds’ portfolios at the end of March. At the end of this article we will also compare MPB to other stocks including PennantPark Investment Corp. (NASDAQ:PNNT), Abeona Therapeutics Inc (NASDAQ:ABEO), and Cooper-Standard Holdings Inc (NYSE:CPS) to get a better sense of its popularity.

Video: Watch our video about the top 5 most popular hedge fund stocks.

In the 21st century investor’s toolkit there are tons of tools stock market investors use to appraise stocks. Some of the less utilized tools are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the best picks of the best fund managers can trounce their index-focused peers by a superb margin (see the details here).

RENAISSANCE TECHNOLOGIES

Jim Simons Founder of Renaissance Technologies

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 gander at the new hedge fund action encompassing Mid Penn Bancorp, Inc. (NASDAQ:MPB).

What have hedge funds been doing with Mid Penn Bancorp, Inc. (NASDAQ:MPB)?

At Q1’s end, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. By comparison, 2 hedge funds held shares or bullish call options in MPB a year ago. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Tontine Asset Management, managed by Jeffrey Gendell, holds the number one position in Mid Penn Bancorp, Inc. (NASDAQ:MPB). Tontine Asset Management has a $1.9 million position in the stock, comprising 0.6% of its 13F portfolio. Coming in second is EJF Capital, managed by Emanuel J. Friedman, which holds a $1.5 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Remaining professional money managers with similar optimism contain David P. Cohen’s Minerva Advisors, Renaissance Technologies and . In terms of the portfolio weights assigned to each position Minerva Advisors allocated the biggest weight to Mid Penn Bancorp, Inc. (NASDAQ:MPB), around 0.7% of its 13F portfolio. Tontine Asset Management is also relatively very bullish on the stock, dishing out 0.58 percent of its 13F equity portfolio to MPB.

Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.

Let’s go over hedge fund activity in other stocks similar to Mid Penn Bancorp, Inc. (NASDAQ:MPB). These stocks are PennantPark Investment Corp. (NASDAQ:PNNT), Abeona Therapeutics Inc (NASDAQ:ABEO), Cooper-Standard Holdings Inc (NYSE:CPS), and Lands’ End, Inc. (NASDAQ:LE). This group of stocks’ market caps match MPB’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PNNT 8 8785 -3
ABEO 19 54889 -3
CPS 11 13018 -3
LE 8 27863 -2
Average 11.5 26139 -2.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 11.5 hedge funds with bullish positions and the average amount invested in these stocks was $26 million. That figure was $5 million in MPB’s case. Abeona Therapeutics Inc (NASDAQ:ABEO) is the most popular stock in this table. On the other hand PennantPark Investment Corp. (NASDAQ:PNNT) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Mid Penn Bancorp, Inc. (NASDAQ:MPB) is even less popular than PNNT. Hedge funds dodged a bullet by taking a bearish stance towards MPB. 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 8.3% in 2020 through the end of May but managed to beat the market by 13.2 percentage points. Unfortunately MPB wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); MPB investors were disappointed as the stock returned -7% during the second quarter (through the end of May) 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.