The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 817 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30th, 2020. What do these smart investors think about Richmond Mutual Bancorporation, Inc. (NASDAQ:RMBI)?
Is Richmond Mutual Bancorporation (RMBI) a good stock to buy now? RMBI shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 5 hedge funds’ portfolios at the end of September. Our calculations also showed that RMBI 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). At the end of this article we will also compare RMBI to other stocks including Postal Realty Trust, Inc. (NYSE:PSTL), GTY Technology Holdings, Inc. (NASDAQ:GTYH), and AudioEye, Inc. (NASDAQ:AEYE) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
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 go over the fresh hedge fund action surrounding Richmond Mutual Bancorporation, Inc. (NASDAQ:RMBI).
What have hedge funds been doing with Richmond Mutual Bancorporation, Inc. (NASDAQ:RMBI)?
At Q3’s end, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards RMBI over the last 21 quarters. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
More specifically, Seidman Investment Partnership was the largest shareholder of Richmond Mutual Bancorporation, Inc. (NASDAQ:RMBI), with a stake worth $2.9 million reported as of the end of September. Trailing Seidman Investment Partnership was Minerva Advisors, which amassed a stake valued at $0.3 million. Winton Capital Management, Two Sigma Advisors, and Basswood Capital 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 Seidman Investment Partnership allocated the biggest weight to Richmond Mutual Bancorporation, Inc. (NASDAQ:RMBI), around 4.44% of its 13F portfolio. Minerva Advisors is also relatively very bullish on the stock, setting aside 0.21 percent of its 13F equity portfolio to RMBI.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Renaissance Technologies. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Winton Capital Management).
Let’s now review hedge fund activity in other stocks similar to Richmond Mutual Bancorporation, Inc. (NASDAQ:RMBI). These stocks are Postal Realty Trust, Inc. (NYSE:PSTL), GTY Technology Holdings, Inc. (NASDAQ:GTYH), AudioEye, Inc. (NASDAQ:AEYE), Parke Bancorp, Inc. (NASDAQ:PKBK), Golar LNG Partners LP (NASDAQ:GMLP), Servicesource International Inc (NASDAQ:SREV), and Lineage Cell Therapeutics, Inc. (NYSE:LCTX). This group of stocks’ market valuations resemble RMBI’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 6.6 hedge funds with bullish positions and the average amount invested in these stocks was $19 million. That figure was $4 million in RMBI’s case. Servicesource International Inc (NASDAQ:SREV) is the most popular stock in this table. On the other hand Parke Bancorp, Inc. (NASDAQ:PKBK) is the least popular one with only 3 bullish hedge fund positions. Richmond Mutual Bancorporation, Inc. (NASDAQ:RMBI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for RMBI is 51.7. 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. 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 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on RMBI as the stock returned 25.2% since the end of the third quarter (through 11/27) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.