We at Insider Monkey have gone over 821 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 March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of Independent Bank Corp (NASDAQ:INDB) based on that data.
Is Independent Bank Corp (NASDAQ:INDB) a buy, sell, or hold? The smart money is in a pessimistic mood. The number of bullish hedge fund positions dropped by 10 recently. Our calculations also showed that INDB isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). INDB was in 4 hedge funds’ portfolios at the end of the first quarter of 2020. There were 14 hedge funds in our database with INDB positions at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 72% since March 2017 and outperformed the S&P 500 ETFs by more than 44 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s check out the key hedge fund action surrounding Independent Bank Corp (NASDAQ:INDB).
Hedge fund activity in Independent Bank Corp (NASDAQ:INDB)
Heading into the second quarter of 2020, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -71% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in INDB over the last 18 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Ken Fisher’s Fisher Asset Management has the number one position in Independent Bank Corp (NASDAQ:INDB), worth close to $6 million, comprising less than 0.1%% of its total 13F portfolio. The second largest stake is held by Ken Griffin of Citadel Investment Group, with a $3.1 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other peers that are bullish contain Brandon Haley’s Holocene Advisors, Bernard Horn’s Polaris Capital Management and . In terms of the portfolio weights assigned to each position Polaris Capital Management allocated the biggest weight to Independent Bank Corp (NASDAQ:INDB), around 0.03% of its 13F portfolio. Fisher Asset Management is also relatively very bullish on the stock, earmarking 0.01 percent of its 13F equity portfolio to INDB.
Judging by the fact that Independent Bank Corp (NASDAQ:INDB) has experienced bearish sentiment from the smart money, it’s safe to say that there exists a select few hedge funds who were dropping their positions entirely by the end of the third quarter. At the top of the heap, Michael Gelband’s ExodusPoint Capital dumped the biggest position of the “upper crust” of funds watched by Insider Monkey, worth about $1.6 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also said goodbye to its stock, about $1.5 million worth. These transactions are intriguing to say the least, as total hedge fund interest was cut by 10 funds by the end of the third quarter.
Let’s go over hedge fund activity in other stocks similar to Independent Bank Corp (NASDAQ:INDB). These stocks are SINA Corp (NASDAQ:SINA), Mimecast Limited (NASDAQ:MIME), Stamps.com Inc. (NASDAQ:STMP), and American National Insurance Company (NASDAQ:ANAT). This group of stocks’ market values match INDB’s market value.
|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 23.75 hedge funds with bullish positions and the average amount invested in these stocks was $289 million. That figure was $10 million in INDB’s case. Mimecast Limited (NASDAQ:MIME) is the most popular stock in this table. On the other hand SINA Corp (NASDAQ:SINA) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Independent Bank Corp (NASDAQ:INDB) is even less popular than SINA. Hedge funds dodged a bullet by taking a bearish stance towards INDB. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but managed to beat the market by 13.2 percentage points. Unfortunately INDB wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); INDB investors were disappointed as the stock returned 7.9% during the second quarter (through the end of May) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 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.