We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Peltz’s recent General Electric losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Riverview Bancorp, Inc. (NASDAQ:RVSB).
Is RVSB a good stock to buy now? Hedge funds were in an optimistic mood. The number of long hedge fund bets improved by 1 in recent months. Riverview Bancorp, Inc. (NASDAQ:RVSB) was in 10 hedge funds’ portfolios at the end of September. The all time high for this statistics is 11. Our calculations also showed that RVSB 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). There were 9 hedge funds in our database with RVSB positions at the end of the second quarter.
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. With all of this in mind we’re going to take a look at the new hedge fund action encompassing Riverview Bancorp, Inc. (NASDAQ:RVSB).
Do Hedge Funds Think RVSB Is A Good Stock To Buy Now?
At Q3’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. By comparison, 10 hedge funds held shares or bullish call options in RVSB a year ago. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Fred Cummings’s Elizabeth Park Capital Management has the number one position in Riverview Bancorp, Inc. (NASDAQ:RVSB), worth close to $1.9 million, accounting for 1.2% of its total 13F portfolio. The second most bullish fund manager is Renaissance Technologies, holding a $1.4 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other peers that hold long positions contain Roger Ibbotson’s Zebra Capital Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and David Harding’s Winton Capital Management. In terms of the portfolio weights assigned to each position Elizabeth Park Capital Management allocated the biggest weight to Riverview Bancorp, Inc. (NASDAQ:RVSB), around 1.23% of its 13F portfolio. Zebra Capital Management is also relatively very bullish on the stock, earmarking 0.83 percent of its 13F equity portfolio to RVSB.
As aggregate interest increased, some big names have been driving this bullishness. PDT Partners, managed by Peter Muller, established the biggest position in Riverview Bancorp, Inc. (NASDAQ:RVSB). PDT Partners had $0 million invested in the company at the end of the quarter. Anton Schutz’s Mendon Capital Advisors also made a $0 million investment in the stock during the quarter.
Let’s go over hedge fund activity in other stocks similar to Riverview Bancorp, Inc. (NASDAQ:RVSB). We will take a look at CONSOL Coal Resources LP (NYSE:CCR), California BanCorp (NASDAQ:CALB), Charah Solutions, Inc. (NYSE:CHRA), Neuronetics, Inc. (NASDAQ:STIM), Milestone Scientific, Inc. (NYSE:MLSS), Outlook Therapeutics, Inc. (NASDAQ:OTLK), and FIRST FINANCIAL NORTHWEST, INC. (NASDAQ:FFNW). This group of stocks’ market values are closest to RVSB’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 5 hedge funds with bullish positions and the average amount invested in these stocks was $11 million. That figure was $5 million in RVSB’s case. Neuronetics, Inc. (NASDAQ:STIM) is the most popular stock in this table. On the other hand Milestone Scientific, Inc. (NYSE:MLSS) is the least popular one with only 1 bullish hedge fund positions. Riverview Bancorp, Inc. (NASDAQ:RVSB) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for RVSB is 67.9. 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. Hedge funds were also right about betting on RVSB as the stock returned 32% since the end of Q3 (through 12/8) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.