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Here’s What Hedge Funds Think About ServisFirst Bancshares, Inc. (SFBS)

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Is ServisFirst Bancshares, Inc. (NASDAQ:SFBS) going to take off soon? The best stock pickers are in a bullish mood. The number of long hedge fund bets rose by 3 recently. Our calculations also showed that SFBS isn’t among the 30 most popular stocks among hedge funds. SFBS was in 11 hedge funds’ portfolios at the end of December. There were 8 hedge funds in our database with SFBS positions at the end of the previous quarter.

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 flagship best performing hedge funds strategy returned 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

GAMCO Investors, Mario Gabelli

Let’s take a peek at the key hedge fund action surrounding ServisFirst Bancshares, Inc. (NASDAQ:SFBS).

How have hedgies been trading ServisFirst Bancshares, Inc. (NASDAQ:SFBS)?

Heading into the first quarter of 2019, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 38% from one quarter earlier. On the other hand, there were a total of 9 hedge funds with a bullish position in SFBS a year ago. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).

SFBS_apr2019

The largest stake in ServisFirst Bancshares, Inc. (NASDAQ:SFBS) was held by Fisher Asset Management, which reported holding $2.7 million worth of stock at the end of December. It was followed by Royce & Associates with a $2.3 million position. Other investors bullish on the company included AQR Capital Management, GAMCO Investors, and Citadel Investment Group.

Now, some big names have jumped into ServisFirst Bancshares, Inc. (NASDAQ:SFBS) headfirst. Citadel Investment Group, managed by Ken Griffin, assembled the most outsized position in ServisFirst Bancshares, Inc. (NASDAQ:SFBS). Citadel Investment Group had $0.8 million invested in the company at the end of the quarter. Gregg Moskowitz’s Interval Partners also made a $0.5 million investment in the stock during the quarter. The following funds were also among the new SFBS investors: Benjamin A. Smith’s Laurion Capital Management and Hoon Kim’s Quantinno Capital.

Let’s now take a look at hedge fund activity in other stocks similar to ServisFirst Bancshares, Inc. (NASDAQ:SFBS). We will take a look at Dycom Industries, Inc. (NYSE:DY), KB Home (NYSE:KBH), Carpenter Technology Corporation (NYSE:CRS), and Hilltop Holdings Inc. (NYSE:HTH). This group of stocks’ market values match SFBS’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
DY 18 125784 -5
KBH 14 274581 -3
CRS 15 87982 1
HTH 14 103124 0
Average 15.25 147868 -1.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 15.25 hedge funds with bullish positions and the average amount invested in these stocks was $148 million. That figure was $10 million in SFBS’s case. Dycom Industries, Inc. (NYSE:DY) is the most popular stock in this table. On the other hand KB Home (NYSE:KBH) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks ServisFirst Bancshares, Inc. (NASDAQ:SFBS) is even less popular than KBH. Hedge funds dodged a bullet by taking a bearish stance towards SFBS. Our calculations showed that the top 15 most popular hedge fund stocks returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately SFBS wasn’t nearly as popular as these 15 stock (hedge fund sentiment was very bearish); SFBS investors were disappointed as the stock returned 3.9% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.

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

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