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. We are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article we look at how hedge funds traded Old Second Bancorp Inc. (NASDAQ:OSBC) and determine whether the smart money was really smart about this stock.
Old Second Bancorp Inc. (NASDAQ:OSBC) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 11 hedge funds’ portfolios at the end of March. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Noodles & Co (NASDAQ:NDLS), Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT), and Lindblad Expeditions Holdings Inc (NASDAQ:LIND) to gather more data points. Our calculations also showed that OSBC 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.
Today there are a lot of gauges stock traders can use to size up their stock investments. A duo of the most innovative gauges are hedge fund and insider trading signals. We have shown that, historically, those who follow the top picks of the top money managers can trounce their index-focused peers by a very impressive amount (see the details here).
At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to go over the key hedge fund action encompassing Old Second Bancorp Inc. (NASDAQ:OSBC).
Hedge fund activity in Old Second Bancorp Inc. (NASDAQ:OSBC)
Heading into the second quarter of 2020, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 12 hedge funds with a bullish position in OSBC a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Renaissance Technologies held the most valuable stake in Old Second Bancorp Inc. (NASDAQ:OSBC), which was worth $7.9 million at the end of the third quarter. On the second spot was Castine Capital Management which amassed $3.3 million worth of shares. Elizabeth Park Capital Management, Arrowstreet Capital, and Two Sigma Advisors 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 Castine Capital Management allocated the biggest weight to Old Second Bancorp Inc. (NASDAQ:OSBC), around 1.82% of its 13F portfolio. Elizabeth Park Capital Management is also relatively very bullish on the stock, setting aside 1.79 percent of its 13F equity portfolio to OSBC.
Since Old Second Bancorp Inc. (NASDAQ:OSBC) has witnessed a decline in interest from the smart money, we can see that there were a few money managers that decided to sell off their full holdings by the end of the first quarter. Intriguingly, Israel Englander’s Millennium Management sold off the largest position of all the hedgies tracked by Insider Monkey, comprising about $1.4 million in stock. Paul Marshall and Ian Wace’s fund, Marshall Wace LLP, also dropped its stock, about $0.7 million worth. These moves are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Old Second Bancorp Inc. (NASDAQ:OSBC) but similarly valued. These stocks are Noodles & Co (NASDAQ:NDLS), Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT), Lindblad Expeditions Holdings Inc (NASDAQ:LIND), and ChannelAdvisor Corp (NYSE:ECOM). This group of stocks’ market values are closest to OSBC’s market value.
|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 13 hedge funds with bullish positions and the average amount invested in these stocks was $36 million. That figure was $16 million in OSBC’s case. Lindblad Expeditions Holdings Inc (NASDAQ:LIND) is the most popular stock in this table. On the other hand Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Old Second Bancorp Inc. (NASDAQ:OSBC) is even less popular than ARCT. Hedge funds dodged a bullet by taking a bearish stance towards OSBC. 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 12.3% in 2020 through June 30th but managed to beat the market by 15.5 percentage points. Unfortunately OSBC wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); OSBC investors were disappointed as the stock returned 12.7% 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 so far in 2020.
Disclosure: None. This article was originally published at Insider Monkey.