We at Insider Monkey have gone over 817 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of Horizon Bancorp (NASDAQ:HBNC) based on that data.
Is HBNC a good stock to buy now? Horizon Bancorp (NASDAQ:HBNC) investors should be aware of a decrease in hedge fund sentiment in recent months. Horizon Bancorp (NASDAQ:HBNC) was in 12 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 14. Our calculations also showed that HBNC 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.
Today there are many tools stock market investors can use to appraise publicly traded companies. Two of the most under-the-radar tools are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the best picks of the best hedge fund managers can beat their index-focused peers by a superb margin (see the details here).
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 we’re going to review the fresh hedge fund action surrounding Horizon Bancorp (NASDAQ:HBNC).
Do Hedge Funds Think HBNC Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -14% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards HBNC over the last 21 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Renaissance Technologies, holds the most valuable position in Horizon Bancorp (NASDAQ:HBNC). Renaissance Technologies has a $8.8 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $3.1 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that hold long positions consist of Ken Griffin’s Citadel Investment Group, John Overdeck and David Siegel’s Two Sigma Advisors and Cliff Asness’s AQR Capital Management. In terms of the portfolio weights assigned to each position Zebra Capital Management allocated the biggest weight to Horizon Bancorp (NASDAQ:HBNC), around 0.59% of its 13F portfolio. Minerva Advisors is also relatively very bullish on the stock, earmarking 0.28 percent of its 13F equity portfolio to HBNC.
Due to the fact that Horizon Bancorp (NASDAQ:HBNC) has faced bearish sentiment from hedge fund managers, it’s safe to say that there lies a certain “tier” of hedgies that elected to cut their positions entirely by the end of the third quarter. Interestingly, Bruce Kovner’s Caxton Associates LP dumped the biggest stake of the “upper crust” of funds watched by Insider Monkey, worth about $0.3 million in stock, and Paul Marshall and Ian Wace’s Marshall Wace LLP was right behind this move, as the fund dropped about $0.3 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 2 funds by the end of the third quarter.
Let’s also examine hedge fund activity in other stocks similar to Horizon Bancorp (NASDAQ:HBNC). These stocks are Vectrus Inc (NYSE:VEC), Universal Insurance Holdings, Inc. (NYSE:UVE), RPT Realty (NYSE:RPT), Koppers Holdings Inc. (NYSE:KOP), G1 Therapeutics, Inc. (NASDAQ:GTHX), Mechel PAO (NYSE:MTL), and eGain Corporation (NASDAQ:EGAN). This group of stocks’ market valuations are similar to HBNC’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 12.4 hedge funds with bullish positions and the average amount invested in these stocks was $26 million. That figure was $17 million in HBNC’s case. Vectrus Inc (NYSE:VEC) is the most popular stock in this table. On the other hand Mechel PAO (NYSE:MTL) is the least popular one with only 3 bullish hedge fund positions. Horizon Bancorp (NASDAQ:HBNC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for HBNC is 60.9. 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 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on HBNC as the stock returned 54.1% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.