The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards FRP Holdings Inc (NASDAQ:FRPH).
Is FRPH a good stock to buy now? FRPH shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 9 hedge funds’ portfolios at the end of the third quarter of 2020. Our calculations also showed that FRPH 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 FRPH to other stocks including Sterling Construction Company, Inc. (NASDAQ:STRL), American Vanguard Corp. (NYSE:AVD), and NexTier Oilfield Solutions Inc. (NYSE:NEX) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
According to most investors, hedge funds are viewed as underperforming, old investment tools of years past. While there are more than 8000 funds in operation at present, We look at the crème de la crème of this group, approximately 850 funds. It is estimated that this group of investors preside over bulk of the hedge fund industry’s total asset base, and by watching their top equity investments, Insider Monkey has brought to light various investment strategies that have historically surpassed Mr. Market. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points per 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 .
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 15 best blue chip stocks 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. Keeping this in mind let’s take a look at the key hedge fund action encompassing FRP Holdings Inc (NASDAQ:FRPH).
Do Hedge Funds Think FRPH Is A Good Stock To Buy Now?
At the end of September, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards FRPH over the last 21 quarters. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).
The largest stake in FRP Holdings Inc (NASDAQ:FRPH) was held by Royce & Associates, which reported holding $14.7 million worth of stock at the end of September. It was followed by Third Avenue Management with a $5.5 million position. Other investors bullish on the company included Sprott Asset Management, Renaissance Technologies, and Intrepid Capital Management. In terms of the portfolio weights assigned to each position Intrepid Capital Management allocated the biggest weight to FRP Holdings Inc (NASDAQ:FRPH), around 1.16% of its 13F portfolio. Third Avenue Management is also relatively very bullish on the stock, setting aside 0.76 percent of its 13F equity portfolio to FRPH.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Two Sigma Advisors. 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 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Cove Street Capital).
Let’s go over hedge fund activity in other stocks similar to FRP Holdings Inc (NASDAQ:FRPH). We will take a look at Sterling Construction Company, Inc. (NASDAQ:STRL), American Vanguard Corp. (NYSE:AVD), NexTier Oilfield Solutions Inc. (NYSE:NEX), Select Energy Services, Inc. (NYSE:WTTR), Kosmos Energy Ltd (NYSE:KOS), Tristate Capital Holdings Inc (NASDAQ:TSC), and SeaSpine Holdings Corp (NASDAQ:SPNE). This group of stocks’ market caps resemble FRPH’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 14.3 hedge funds with bullish positions and the average amount invested in these stocks was $45 million. That figure was $31 million in FRPH’s case. NexTier Oilfield Solutions Inc. (NYSE:NEX) is the most popular stock in this table. On the other hand American Vanguard Corp. (NYSE:AVD) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks FRP Holdings Inc (NASDAQ:FRPH) is even less popular than AVD. Our overall hedge fund sentiment score for FRPH is 35. 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. Hedge funds dodged a bullet by taking a bearish stance towards FRPH. Our calculations showed that the top 20 most popular hedge fund stocks returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th but managed to beat the market again by 16.2 percentage points. Unfortunately FRPH wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); FRPH investors were disappointed as the stock returned 9% since the end of the third quarter (through 12/8) 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 so far in 2020.
Disclosure: None. This article was originally published at Insider Monkey.