Is County Bancorp, Inc. (ICBK) Going to Burn These Hedge Funds?

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of County Bancorp, Inc. (NASDAQ:ICBK) based on that data.

County Bancorp, Inc. (NASDAQ:ICBK) investors should pay attention to a decrease in hedge fund interest recently. Our calculations also showed that ICBK 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 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 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.

Fred DiSanto Ancora Advisors

Fred DiSanto of Ancora Advisors

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 we’re going to take a look at the recent hedge fund action encompassing County Bancorp, Inc. (NASDAQ:ICBK).

Hedge fund activity in County Bancorp, Inc. (NASDAQ:ICBK)

Heading into the second quarter of 2020, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -29% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards ICBK over the last 18 quarters. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

Is ICBK A Good Stock To Buy?

Of the funds tracked by Insider Monkey, Royce & Associates, managed by Chuck Royce, holds the most valuable position in County Bancorp, Inc. (NASDAQ:ICBK). Royce & Associates has a $2.8 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Tontine Asset Management, led by Jeffrey Gendell, holding a $2.7 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Remaining members of the smart money that are bullish encompass Frederick DiSanto’s Ancora Advisors, Israel Englander’s Millennium Management and  Renaissance Technologies. In terms of the portfolio weights assigned to each position Tontine Asset Management allocated the biggest weight to County Bancorp, Inc. (NASDAQ:ICBK), around 0.83% of its 13F portfolio. Ancora Advisors is also relatively very bullish on the stock, dishing out 0.07 percent of its 13F equity portfolio to ICBK.

Seeing as County Bancorp, Inc. (NASDAQ:ICBK) has witnessed falling interest from the smart money, it’s easy to see that there lies a certain “tier” of hedgies who sold off their positions entirely last quarter. At the top of the heap, Donald Sussman’s Paloma Partners cut the biggest investment of the 750 funds watched by Insider Monkey, comprising close to $0.3 million in stock. David Nguyen and Nancy Oh’s fund, One68 Global Capital, also dropped its stock, about $0.2 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 2 funds last quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as County Bancorp, Inc. (NASDAQ:ICBK) but similarly valued. We will take a look at Farmer Brothers Co. (NASDAQ:FARM), Affimed NV (NASDAQ:AFMD), Altisource Portfolio Solutions S.A. (NASDAQ:ASPS), and Advanced Emissions Solutions, Inc. (NASDAQ:ADES). All of these stocks’ market caps are similar to ICBK’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
FARM 16 39910 4
AFMD 16 21432 3
ASPS 8 7589 1
ADES 8 22010 -2
Average 12 22735 1.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $23 million. That figure was $9 million in ICBK’s case. Farmer Brothers Co. (NASDAQ:FARM) is the most popular stock in this table. On the other hand Altisource Portfolio Solutions S.A. (NASDAQ:ASPS) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks County Bancorp, Inc. (NASDAQ:ICBK) is even less popular than ASPS. Hedge funds dodged a bullet by taking a bearish stance towards ICBK. 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 8.3% in 2020 through the end of May but managed to beat the market by 13.2 percentage points. Unfortunately ICBK wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); ICBK investors were disappointed as the stock returned 17.6% during the second quarter (through the end of May) 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.

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