Is Independent Bank Corp (NASDAQ:INDB) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is INDB a good stock to buy now? Money managers were taking an optimistic view. The number of bullish hedge fund bets increased by 5 lately. Independent Bank Corp (NASDAQ:INDB) 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 INDB 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.
At the moment there are a lot of gauges market participants put to use to size up stocks. Some of the less utilized gauges are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the best picks of the top money managers can outclass the S&P 500 by a healthy 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. Now we’re going to review the latest hedge fund action regarding Independent Bank Corp (NASDAQ:INDB).
Do Hedge Funds Think INDB Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 71% from one quarter earlier. On the other hand, there were a total of 13 hedge funds with a bullish position in INDB a year ago. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
The largest stake in Independent Bank Corp (NASDAQ:INDB) was held by Fisher Asset Management, which reported holding $5 million worth of stock at the end of September. It was followed by Balyasny Asset Management with a $2.9 million position. Other investors bullish on the company included Tudor Investment Corp, Millennium Management, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Tudor Investment Corp allocated the biggest weight to Independent Bank Corp (NASDAQ:INDB), around 0.05% of its 13F portfolio. AlphaCrest Capital Management is also relatively very bullish on the stock, setting aside 0.05 percent of its 13F equity portfolio to INDB.
As industrywide interest jumped, specific money managers have been driving this bullishness. Tudor Investment Corp, managed by Paul Tudor Jones, created the largest position in Independent Bank Corp (NASDAQ:INDB). Tudor Investment Corp had $1.2 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0.7 million investment in the stock during the quarter. The other funds with brand new INDB positions are Michael Gelband’s ExodusPoint Capital, Mika Toikka’s AlphaCrest Capital Management, and Benjamin A. Smith’s Laurion Capital Management.
Let’s now take a look at hedge fund activity in other stocks similar to Independent Bank Corp (NASDAQ:INDB). We will take a look at Kura Oncology, Inc. (NASDAQ:KURA), AlloVir, Inc. (NASDAQ:ALVR), Six Flags Entertainment Corp (NYSE:SIX), AMTD International Inc. (NYSE:HKIB), MaxLinear, Inc. (NYSE:MXL), Hub Group Inc (NASDAQ:HUBG), and Sunstone Hotel Investors Inc (NYSE:SHO). This group of stocks’ market caps match INDB’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 19.7 hedge funds with bullish positions and the average amount invested in these stocks was $244 million. That figure was $13 million in INDB’s case. Six Flags Entertainment Corp (NYSE:SIX) is the most popular stock in this table. On the other hand AMTD International Inc. (NYSE:HKIB) is the least popular one with only 1 bullish hedge fund positions. Independent Bank Corp (NASDAQ:INDB) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for INDB is 51. 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 INDB as the stock returned 39.4% 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.