In this article we will take a look at whether hedge funds think First Western Financial, Inc. (NASDAQ:MYFW) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Hedge fund interest in First Western Financial, Inc. (NASDAQ:MYFW) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that MYFW 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). At the end of this article we will also compare MYFW to other stocks including PhaseBio Pharmaceuticals, Inc. (NASDAQ:PHAS), CB Financial Services, Inc. (NASDAQ:CBFV), and Sharps Compliance Corp. (NASDAQ:SMED) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most investors, hedge funds are viewed as slow, old financial vehicles of the past. While there are greater than 8000 funds with their doors open today, Our researchers hone in on the top tier of this club, approximately 850 funds. These hedge fund managers preside over bulk of the smart money’s total asset base, and by keeping an eye on their inimitable investments, Insider Monkey has spotted various investment strategies that have historically outperformed the market. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
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What does smart money think about First Western Financial, Inc. (NASDAQ:MYFW)?
Heading into the fourth quarter of 2020, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. By comparison, 3 hedge funds held shares or bullish call options in MYFW a year ago. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).
More specifically, Elizabeth Park Capital Management was the largest shareholder of First Western Financial, Inc. (NASDAQ:MYFW), with a stake worth $4.1 million reported as of the end of September. Trailing Elizabeth Park Capital Management was Mendon Capital Advisors, which amassed a stake valued at $0.4 million. Renaissance Technologies was 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 Elizabeth Park Capital Management allocated the biggest weight to First Western Financial, Inc. (NASDAQ:MYFW), around 2.68% of its 13F portfolio. Mendon Capital Advisors is also relatively very bullish on the stock, dishing out 0.21 percent of its 13F equity portfolio to MYFW.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s go over hedge fund activity in other stocks similar to First Western Financial, Inc. (NASDAQ:MYFW). These stocks are PhaseBio Pharmaceuticals, Inc. (NASDAQ:PHAS), CB Financial Services, Inc. (NASDAQ:CBFV), Sharps Compliance Corp. (NASDAQ:SMED), Mediwound Ltd (NASDAQ:MDWD), Colony Bankcorp Inc (NASDAQ:CBAN), SMTC Corporation (NASDAQ:SMTX), and First Community Corporation (NASDAQ:FCCO). This group of stocks’ market caps are closest to MYFW’s market cap.
|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 3.7 hedge funds with bullish positions and the average amount invested in these stocks was $7 million. That figure was $5 million in MYFW’s case. PhaseBio Pharmaceuticals, Inc. (NASDAQ:PHAS) is the most popular stock in this table. On the other hand CB Financial Services, Inc. (NASDAQ:CBFV) is the least popular one with only 2 bullish hedge fund positions. First Western Financial, Inc. (NASDAQ:MYFW) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for MYFW is 39.7. 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. 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 still beat the market by 15.4 percentage points. A small number of hedge funds were also right about betting on MYFW as the stock returned 32.2% since the end of the third quarter (through 11/23) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.