Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
First Connecticut Bancorp Inc (NASDAQ:FBNK) investors should be aware of unchanged hedge fund sentiment in recent months. FBNK was in 9 hedge funds’ portfolios at the end of September. There were 9 hedge funds in our database with FBNK holdings at the end of June as well. At the end of this article we will also compare FBNK to other stocks including PFSweb, Inc. (NASDAQ:PFSW), QCR Holdings, Inc. (NASDAQ:QCRH), and Capital City Bank Group, Inc. (NASDAQ:CCBG) to get a better sense of its popularity.
What does the smart money think about First Connecticut Bancorp Inc (NASDAQ:FBNK)?
Heading into Q4, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the second quarter. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
When looking at the hedgies followed by Insider Monkey, Matthew Lindenbaum’s Basswood Capital has the biggest position in First Connecticut Bancorp Inc (NASDAQ:FBNK), worth close to $15.5 million, accounting for 0.8% of its total 13F portfolio. Coming in second is Rutabaga Capital Management, led by Peter Schliemann, holding a $11.2 million position; the fund has 1.4% of its 13F portfolio invested in the stock. Other hedge funds with similar optimism encompass Emanuel J. Friedman’s EJF Capital, Jim Simons’s Renaissance Technologies and Joshua Nash’s Ulysses Management.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Moab Capital Partners. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 700+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was “Millennium Management).
Let’s check out hedge fund activity in other stocks similar to First Connecticut Bancorp Inc (NASDAQ:FBNK). These stocks are PFSweb, Inc. (NASDAQ:PFSW), QCR Holdings, Inc. (NASDAQ:QCRH), Capital City Bank Group, Inc. (NASDAQ:CCBG), and U.S. Lime & Minerals Inc. (NASDAQ:USLM). This group of stocks’ market caps match FBNK’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 6.75 hedge funds with bullish positions and the average amount invested in these stocks was $20 million. PFSweb, Inc. (NASDAQ:PFSW) is the most popular stock in this table. On the other hand U.S. Lime & Minerals Inc. (NASDAQ:USLM) is the least popular one with only 4 bullish hedge fund positions. First Connecticut Bancorp Inc (NASDAQ:FBNK) is not the most popular stock in this group but hedge fund interest is still above average. This makes it a stock worth considering, although it seems that a better choice, at the moment, is PFSW that hedge funds are piling on. In either case, more research is advisable.