At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.
BancFirst Corporation (NASDAQ:BANF) was in 8 hedge funds’ portfolios at the end of September. BANF has seen an increase in enthusiasm from smart money in recent months. There were 6 hedge funds in our database with BANF positions at the end of the previous quarter. 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 First Bancorp (NYSE:FBP), Installed Building Products Inc (NYSE:IBP), and Amerisafe, Inc. (NASDAQ:AMSF) to gather more data points.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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How are hedge funds trading BancFirst Corporation (NASDAQ:BANF)?
At Q3’s end, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, up by 33% from the previous quarter. By comparison, 4 hedge funds held shares or bullish call options in BANF heading into this year. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, one of the largest hedge funds in the world, holds the most valuable position in BancFirst Corporation (NASDAQ:BANF). Renaissance Technologies has a $8.9 million position in the stock. Sitting at the No. 2 spot is Cliff Asness’ AQR Capital Management holding a $1.6 million position. Other members of the smart money with similar optimism include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Roger Ibbotson’s Zebra Capital Management and John Overdeck and David Siegel’s Two Sigma Advisors. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Consequently, some big names were breaking ground themselves. Arrowstreet Capital established the most outsized position in BancFirst Corporation (NASDAQ:BANF) which had $1.6 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0.2 million position during the quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as BancFirst Corporation (NASDAQ:BANF) but similarly valued. These stocks are First Bancorp (NYSE:FBP), Installed Building Products Inc (NYSE:IBP), Amerisafe, Inc. (NASDAQ:AMSF), and Green Dot Corporation (NYSE:GDOT). All of these stocks’ market caps are closest to BANF’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FBP | 17 | 245326 | 1 |
| IBP | 13 | 53809 | -3 |
| AMSF | 8 | 17850 | -3 |
| GDOT | 17 | 180354 | -2 |
As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $124 million. That figure was $14 million in BANF’s case. First Bancorp (NYSE:FBP) is the most popular stock in this table. On the other hand Amerisafe, Inc. (NASDAQ:AMSF) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks BancFirst Corporation (NASDAQ:BANF) is even less popular than AMSF. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
Disclosure: None
