The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. Now, we are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article you are going to find out whether hedge funds thoughtPremier Financial Corp. (NASDAQ:FDEF) was a good investment heading into the second quarter and how the stock traded in comparison to the top hedge fund picks.
Premier Financial Corp. (NASDAQ:FDEF) investors should be aware of an increase in activity from the world’s largest hedge funds in recent months. Our calculations also showed that FDEF 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).
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 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 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 scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to take a glance at the latest hedge fund action surrounding Premier Financial Corp. (NASDAQ:FDEF).
What have hedge funds been doing with Premier Financial Corp. (NASDAQ:FDEF)?
At Q1’s end, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 11% from one quarter earlier. On the other hand, there were a total of 9 hedge funds with a bullish position in FDEF a year ago. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, holds the largest position in Premier Financial Corp. (NASDAQ:FDEF). Renaissance Technologies has a $21.7 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by Polaris Capital Management, led by Bernard Horn, holding a $6.7 million position; 0.4% of its 13F portfolio is allocated to the stock. Other members of the smart money that hold long positions consist of Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Fred Cummings’s Elizabeth Park Capital Management and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position Elizabeth Park Capital Management allocated the biggest weight to Premier Financial Corp. (NASDAQ:FDEF), around 1.91% of its 13F portfolio. Polaris Capital Management is also relatively very bullish on the stock, dishing out 0.4 percent of its 13F equity portfolio to FDEF.
Now, key money managers have been driving this bullishness. Elizabeth Park Capital Management, managed by Fred Cummings, assembled the largest position in Premier Financial Corp. (NASDAQ:FDEF). Elizabeth Park Capital Management had $2.5 million invested in the company at the end of the quarter. Thomas Bailard’s Bailard Inc also initiated a $0.3 million position during the quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Premier Financial Corp. (NASDAQ:FDEF) but similarly valued. We will take a look at Oi SA (NYSE:OIBR), Vanda Pharmaceuticals Inc. (NASDAQ:VNDA), Meredith Corporation (NYSE:MDP), and CEVA, Inc. (NASDAQ:CEVA). This group of stocks’ market values resemble FDEF’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 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $86 million. That figure was $41 million in FDEF’s case. Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) is the most popular stock in this table. On the other hand Oi SA (NYSE:OIBR) is the least popular one with only 8 bullish hedge fund positions. Premier Financial Corp. (NASDAQ:FDEF) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.3% in 2020 through June 30th but beat the market by 15.5 percentage points. A small number of hedge funds were also right about betting on FDEF, though not to the same extent, as the stock returned 21.8% during the second quarter and outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.