Is NBTB A Good Stock To Buy Now?

Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 817 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about NBT Bancorp Inc. (NASDAQ:NBTB) in this article.

Is NBTB a good stock to buy now? NBT Bancorp Inc. (NASDAQ:NBTB) investors should pay attention to a decrease in hedge fund sentiment recently. NBT Bancorp Inc. (NASDAQ:NBTB) was in 8 hedge funds’ portfolios at the end of September. The all time high for this statistics is 9. Our calculations also showed that NBTB 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 metrics investors use to appraise their holdings. A pair of the best metrics are hedge fund and insider trading interest. We have shown that, historically, those who follow the best picks of the top fund managers can outperform the S&P 500 by a superb amount (see the details here).

Donald Sussman Paloma Partners

Donald Sussman of Paloma Partners

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 5 best cheap stocks to buy according to Ray Dalio to identify stocks with upside potential. 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. With all of this in mind let’s take a look at the fresh hedge fund action regarding NBT Bancorp Inc. (NASDAQ:NBTB).

What does smart money think about NBT Bancorp Inc. (NASDAQ:NBTB)?

At the end of September, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of -11% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in NBTB over the last 21 quarters. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).

Is NBTB A Good Stock To Buy?

Among these funds, Renaissance Technologies held the most valuable stake in NBT Bancorp Inc. (NASDAQ:NBTB), which was worth $6.4 million at the end of the third quarter. On the second spot was Tudor Investment Corp which amassed $0.9 million worth of shares. Millennium Management, AQR Capital Management, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Tudor Investment Corp allocated the biggest weight to NBT Bancorp Inc. (NASDAQ:NBTB), around 0.04% of its 13F portfolio. Winton Capital Management is also relatively very bullish on the stock, earmarking 0.02 percent of its 13F equity portfolio to NBTB.

Since NBT Bancorp Inc. (NASDAQ:NBTB) has witnessed falling interest from hedge fund managers, logic holds that there exists a select few hedge funds that decided to sell off their entire stakes heading into Q4. At the top of the heap, Dmitry Balyasny’s Balyasny Asset Management said goodbye to the largest position of the “upper crust” of funds monitored by Insider Monkey, worth about $0.6 million in stock. Matthew Hulsizer’s fund, PEAK6 Capital Management, also said goodbye to its stock, about $0.2 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 1 funds heading into Q4.

Let’s now review hedge fund activity in other stocks similar to NBT Bancorp Inc. (NASDAQ:NBTB). These stocks are FB Financial Corporation (NYSE:FBK), Stewart Information Services Corp (NYSE:STC), Helios Technologies, Inc. (NASDAQ:HLIO), Intellia Therapeutics, Inc. (NASDAQ:NTLA), Sixth Street Specialty Lending Inc (NYSE:TSLX), Bitauto Hldg Ltd (NYSE:BITA), and Steelcase Inc. (NYSE:SCS). This group of stocks’ market values match NBTB’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
FBK 9 49679 -3
STC 19 103657 4
HLIO 8 55418 -1
NTLA 15 62356 -2
TSLX 11 75906 1
BITA 16 158755 0
SCS 22 93278 0
Average 14.3 85578 -0.1

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 $86 million. That figure was $10 million in NBTB’s case. Steelcase Inc. (NYSE:SCS) is the most popular stock in this table. On the other hand Helios Technologies, Inc. (NASDAQ:HLIO) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks NBT Bancorp Inc. (NASDAQ:NBTB) is even less popular than HLIO. Our overall hedge fund sentiment score for NBTB is 30.7. 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 clearly dropped the ball on NBTB as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. 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 31.6% in 2020 through December 2nd and still beat the market by 16 percentage points. A small number of hedge funds were also right about betting on NBTB as the stock returned 16.5% since Q3 (through December 2nd) and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.