Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of FFBW, Inc. (NASDAQ:FFBW).
FFBW, Inc. (NASDAQ:FFBW) was in 3 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 2. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. FFBW has experienced an increase in enthusiasm from smart money recently. There were 2 hedge funds in our database with FFBW positions at the end of the second quarter. Our calculations also showed that FFBW 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).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
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 we’re going to view the latest hedge fund action regarding FFBW, Inc. (NASDAQ:FFBW).
How are hedge funds trading FFBW, Inc. (NASDAQ:FFBW)?
At the end of the third quarter, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 50% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards FFBW over the last 21 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in FFBW, Inc. (NASDAQ:FFBW) was held by MFP Investors, which reported holding $2.7 million worth of stock at the end of September. It was followed by Millennium Management with a $0.5 million position. The only other hedge fund that is bullish on the company was Renaissance Technologies.
As industrywide interest jumped, some big names were leading the bulls’ herd. Millennium Management, managed by Israel Englander, established the most outsized position in FFBW, Inc. (NASDAQ:FFBW). Millennium Management had $0.5 million invested in the company at the end of the quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as FFBW, Inc. (NASDAQ:FFBW) but similarly valued. These stocks are ASLAN Pharmaceuticals Limited (NASDAQ:ASLN), Tantech Holdings Ltd. (NASDAQ:TANH), Clearside Biomedical, Inc. (NASDAQ:CLSD), Adamis Pharmaceuticals Corporation (NASDAQ:ADMP), Assertio Holdings Inc. (NASDAQ:ASRT), Navidea Biopharmaceuticals Inc (NYSE:NAVB), and Rhinebeck Bancorp, Inc. (NASDAQ:RBKB). This group of stocks’ market valuations match FFBW’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 4.1 hedge funds with bullish positions and the average amount invested in these stocks was $4 million. That figure was $4 million in FFBW’s case. Assertio Holdings Inc. (NASDAQ:ASRT) is the most popular stock in this table. On the other hand Adamis Pharmaceuticals Corporation (NASDAQ:ADMP) is the least popular one with only 1 bullish hedge fund positions. FFBW, Inc. (NASDAQ:FFBW) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for FFBW is 44.3. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 28.1% in 2020 through November 23rd and surpassed the market again by 15.4 percentage points. Unfortunately FFBW wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); FFBW investors were disappointed as the stock returned 4.2% since the end of September (through 11/23) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.