Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Esquire Financial Holdings, Inc. (NASDAQ:ESQ) based on that data.
Is Esquire Financial Holdings, Inc. (NASDAQ:ESQ) ready to rally soon? Investors who are in the know are taking a bearish view. The number of long hedge fund positions shrunk by 1 in recent months. Our calculations also showed that ESQ 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). ESQ was in 4 hedge funds’ portfolios at the end of March. There were 5 hedge funds in our database with ESQ holdings at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most investors, hedge funds are viewed as underperforming, old financial tools of years past. While there are greater than 8000 funds trading today, Our experts look at the bigwigs of this group, about 850 funds. These investment experts administer the lion’s share of the hedge fund industry’s total capital, and by monitoring their matchless investments, Insider Monkey has unearthed a few investment strategies that have historically exceeded the broader indices. Insider Monkey’s flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
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 trades like this one. 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 let’s take a look at the fresh hedge fund action surrounding Esquire Financial Holdings, Inc. (NASDAQ:ESQ).
How are hedge funds trading Esquire Financial Holdings, Inc. (NASDAQ:ESQ)?
Heading into the second quarter of 2020, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -20% from the previous quarter. The graph below displays the number of hedge funds with bullish position in ESQ over the last 18 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Matthew Lindenbaum’s Basswood Capital has the most valuable position in Esquire Financial Holdings, Inc. (NASDAQ:ESQ), worth close to $6.7 million, amounting to 0.8% of its total 13F portfolio. On Basswood Capital’s heels is Mendon Capital Advisors, managed by Anton Schutz, which holds a $1.7 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Some other professional money managers with similar optimism encompass Renaissance Technologies, Paul Marshall and Ian Wace’s Marshall Wace LLP and . In terms of the portfolio weights assigned to each position Mendon Capital Advisors allocated the biggest weight to Esquire Financial Holdings, Inc. (NASDAQ:ESQ), around 0.82% of its 13F portfolio. Basswood Capital is also relatively very bullish on the stock, setting aside 0.78 percent of its 13F equity portfolio to ESQ.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Polar 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 ESQ 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 Esquire Financial Holdings, Inc. (NASDAQ:ESQ) but similarly valued. We will take a look at J.C. Penney Company, Inc. (NYSE:JCP), LogicBio Therapeutics, Inc. (NASDAQ:LOGC), Mustang Bio, Inc. (NASDAQ:MBIO), and Safeguard Scientifics, Inc (NYSE:SFE). This group of stocks’ market valuations match ESQ’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $17 million. That figure was $9 million in ESQ’s case. J.C. Penney Company, Inc. (NYSE:JCP) is the most popular stock in this table. On the other hand LogicBio Therapeutics, Inc. (NASDAQ:LOGC) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Esquire Financial Holdings, Inc. (NASDAQ:ESQ) is even less popular than LOGC. Hedge funds dodged a bullet by taking a bearish stance towards ESQ. 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 ESQ wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); ESQ investors were disappointed as the stock returned 13.8% 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.
Disclosure: None. This article was originally published at Insider Monkey.