Is Hampton Roads Bankshares, Inc. (HMPR) A Good Stock To Buy?

Insider Monkey has processed numerous 13F filings of hedge funds and famous investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds and investors’ positions as of the end of the third quarter. You can find write-ups 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 and analyze what the smart money thinks of Hampton Roads Bankshares, Inc. (NASDAQ:HMPR) based on that data.

Hampton Roads Bankshares, Inc. (NASDAQ:HMPR) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 6 hedge funds’ portfolios at the end of the third quarter of 2015. At the end of this article we will also compare HMPR to other stocks, including Arbor Realty Trust, Inc. (NYSE:ABR), Parker Drilling Company (NYSE:PKD), and Medifast, Inc. (NYSE:MED) to get a better sense of its popularity.

Today there are a large number of tools shareholders use to size up stocks. Two of the most innovative tools are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the best picks of the elite hedge fund managers can beat the S&P 500 by a very impressive margin (see the details here).

Now, let’s analyze the latest action regarding Hampton Roads Bankshares, Inc. (NASDAQ:HMPR).

Hedge fund activity in Hampton Roads Bankshares, Inc. (NASDAQ:HMPR)

Heading into Q4, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, unchanged from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Anchorage Advisors, managed by Kevin Michael Ulrich and Anthony Davis, holds the most valuable position in Hampton Roads Bankshares, Inc. (NASDAQ:HMPR). In its latest 13F filing, the fund has reported a $80.6 million position in the stock, comprising 2.6% of its 13F portfolio. On Anchorage Advisors’s heels is Emanuel J. Friedman of EJF Capital, with a $14.7 million position; 0.7% of its 13F portfolio is allocated to the company. Some other professional money managers that hold long positions encompass Matthew Lindenbaum’s Basswood Capital, Anton Schutz’s Mendon Capital Advisors and Jim Simons’s Renaissance Technologies.

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 now review hedge fund activity in other stocks similar to Hampton Roads Bankshares, Inc. (NASDAQ:HMPR). We will take a look at Arbor Realty Trust, Inc. (NYSE:ABR), Parker Drilling Company (NYSE:PKD), Medifast, Inc. (NYSE:MED), and Safeguard Scientifics, Inc (NYSE:SFE). This group of stocks’ market values resemble HMPR’s market value.

As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $28 million. HMPR, on the other hand, managed to attract an impressive $106 million. Medifast, Inc. (NYSE:MED) is the most popular stock in this table, while Safeguard Scientifics, Inc (NYSE:SFE) is the laggard with only 5 bullish hedge fund positions. Hampton Roads Bankshares, Inc. (NASDAQ:HMPR) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard MED might be a better candidate to consider a long position.