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Here is What Hedge Funds Think About Middlefield Banc Corp. (MBCN)

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 Middlefield Banc Corp. (NASDAQ:MBCN).

Middlefield Banc Corp. (NASDAQ:MBCN) was in 4 hedge funds’ portfolios at the end of March. MBCN has seen a decrease in support from the world’s most elite money managers of late. There were 5 hedge funds in our database with MBCN holdings at the end of the previous quarter. Our calculations also showed that MBCN 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.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 87% since March 2017 and outperformed the S&P 500 ETFs by more than 51 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Xiniya Earnings Call Transcript XNY 2014 Q3

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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 let’s analyze the new hedge fund action encompassing Middlefield Banc Corp. (NASDAQ:MBCN).

Hedge fund activity in Middlefield Banc Corp. (NASDAQ:MBCN)

Heading into the second quarter of 2020, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -20% from one quarter earlier. On the other hand, there were a total of 2 hedge funds with a bullish position in MBCN a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Ancora Advisors, managed by Frederick DiSanto, holds the biggest position in Middlefield Banc Corp. (NASDAQ:MBCN). Ancora Advisors has a $6 million position in the stock, comprising 0.3% of its 13F portfolio. The second most bullish fund manager is Elizabeth Park Capital Management, managed by Fred Cummings, which holds a $2.6 million position; the fund has 1.9% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism contain Renaissance Technologies, Israel Englander’s Millennium Management and . In terms of the portfolio weights assigned to each position Elizabeth Park Capital Management allocated the biggest weight to Middlefield Banc Corp. (NASDAQ:MBCN), around 1.94% of its 13F portfolio. Ancora Advisors is also relatively very bullish on the stock, setting aside 0.28 percent of its 13F equity portfolio to MBCN.

Because Middlefield Banc Corp. (NASDAQ:MBCN) has experienced falling interest from the entirety of the hedge funds we track, it’s safe to say that there is a sect of money managers that slashed their full holdings last quarter. It’s worth mentioning that Michael Gelband’s ExodusPoint Capital cut the biggest investment of the “upper crust” of funds watched by Insider Monkey, valued at close to $0.4 million in stock. Donald Sussman’s fund, Paloma Partners, also sold off its stock, about $0.4 million worth. These moves are important to note, as total hedge fund interest was cut by 1 funds last quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Middlefield Banc Corp. (NASDAQ:MBCN) but similarly valued. We will take a look at Gamida Cell Ltd. (NASDAQ:GMDA), CB Financial Services, Inc. (NASDAQ:CBFV), Union Bankshares, Inc. (NASDAQ:UNB), and CymaBay Therapeutics Inc (NASDAQ:CBAY). All of these stocks’ market caps match MBCN’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
GMDA 5 7222 0
CBFV 4 2765 -2
UNB 1 547 0
CBAY 14 41611 -5
Average 6 13036 -1.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $13 million. That figure was $11 million in MBCN’s case. CymaBay Therapeutics Inc (NASDAQ:CBAY) is the most popular stock in this table. On the other hand Union Bankshares, Inc. (NASDAQ:UNB) is the least popular one with only 1 bullish hedge fund positions. Middlefield Banc Corp. (NASDAQ:MBCN) is not the least popular stock in this group but hedge fund interest is still below average. 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 8.3% in 2020 through the end of May but beat the market by 13.2 percentage points. A small number of hedge funds were also right about betting on MBCN, though not to the same extent, as the stock returned 20.2% during the second quarter and outperformed the market.

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