Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks aren’t doing great but many of the stocks that delivered strong returns since March are still going very strong and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment to Altabancorp (NASDAQ:ALTA) changed recently.
Is Altabancorp (NASDAQ:ALTA) a good stock to buy now? Money managers were turning bullish. The number of long hedge fund bets went up by 1 in recent months. Altabancorp (NASDAQ:ALTA) was in 5 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 7. Our calculations also showed that ALTA isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). There were 4 hedge funds in our database with ALTA holdings at the end of June.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are several gauges stock market investors have at their disposal to assess stocks. A couple of the most underrated gauges are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the best picks of the top investment managers can outperform their index-focused peers by a superb amount (see the details here).
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind let’s check out the fresh hedge fund action surrounding Altabancorp (NASDAQ:ALTA).
What have hedge funds been doing with Altabancorp (NASDAQ:ALTA)?
At the end of the third quarter, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25% from the previous quarter. By comparison, 7 hedge funds held shares or bullish call options in ALTA a year ago. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
More specifically, Forest Hill Capital was the largest shareholder of Altabancorp (NASDAQ:ALTA), with a stake worth $7.3 million reported as of the end of September. Trailing Forest Hill Capital was Renaissance Technologies, which amassed a stake valued at $3.9 million. EJF Capital, JCSD Capital, and Winton Capital Management 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 Forest Hill Capital allocated the biggest weight to Altabancorp (NASDAQ:ALTA), around 3.34% of its 13F portfolio. JCSD Capital is also relatively very bullish on the stock, earmarking 1.03 percent of its 13F equity portfolio to ALTA.
As aggregate interest increased, some big names have been driving this bullishness. EJF Capital, managed by Emanuel J. Friedman, assembled the most outsized position in Altabancorp (NASDAQ:ALTA). EJF Capital had $2.7 million invested in the company at the end of the quarter. Joseph P. Colmery and Steven J. Didion’s JCSD Capital also made a $0.8 million investment in the stock during the quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Altabancorp (NASDAQ:ALTA) but similarly valued. These stocks are BioDelivery Sciences International, Inc. (NASDAQ:BDSI), Avid Technology, Inc. (NASDAQ:AVID), VirnetX Holding Corporation (NYSE:VHC), Resources Connection, Inc. (NASDAQ:RGP), TransMedics Group, Inc. (NASDAQ:TMDX), Dime Community Bancshares, Inc. (NASDAQ:DCOM), and Thermon Group Holdings, Inc. (NYSE:THR). This group of stocks’ market valuations resemble ALTA’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 13.1 hedge funds with bullish positions and the average amount invested in these stocks was $56 million. That figure was $16 million in ALTA’s case. BioDelivery Sciences International, Inc. (NASDAQ:BDSI) is the most popular stock in this table. On the other hand VirnetX Holding Corporation (NYSE:VHC) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Altabancorp (NASDAQ:ALTA) is even less popular than VHC. Our overall hedge fund sentiment score for ALTA is 27.4. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Hedge funds clearly dropped the ball on ALTA as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on ALTA as the stock returned 37.2% since Q3 (through November 27th) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.