Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Is Sandy Spring Bancorp Inc. (SASR) A Good Stock To Buy?

Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Sandy Spring Bancorp Inc. (NASDAQ:SASR).

Sandy Spring Bancorp Inc. (NASDAQ:SASR) was in 4 hedge funds’ portfolios at the end of September, flat from the number of funds long the stock at the end of June. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Premiere Global Services, Inc. (NYSE:PGI), Valhi, Inc. (NYSE:VHI), and Windstream Holdings, Inc. (NASDAQ:WIN) to gather more data points.

Follow Sandy Spring Bancorp Inc (NASDAQ:SASR)
Trade (NASDAQ:SASR) Now!

Keeping this in mind, let’s take a look at the new action surrounding Sandy Spring Bancorp Inc. (NASDAQ:SASR).

What does the smart money think about Sandy Spring Bancorp Inc. (NASDAQ:SASR)?

Heading into Q4, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, flat over the previous quarter, which is bearish from our experience. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their holdings substantially (or already accumulated large positions).

According to publicly available hedge fund holdings data compiled by Insider Monkey, Mark Lee’s Forest Hill Capital had the number one position in Sandy Spring Bancorp Inc. (NASDAQ:SASR), worth close to $47.6 million, comprising 4.5% of its total 13F portfolio. Coming in second is Renaissance Technologies, which held a $4.6 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Some other hedgies with similar optimism contain Israel Englander’s Millennium Management, Ken Griffin’s Citadel Investment Group and .

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: AQR Capital Management. 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 700+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Millennium Management).

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Sandy Spring Bancorp Inc. (NASDAQ:SASR) but similarly valued. These stocks are Premiere Global Services, Inc. (NYSE:PGI), Valhi, Inc. (NYSE:VHI), Windstream Corporation (NASDAQ:WIN), and Universal Electronics Inc (NASDAQ:UEIC). This group of stocks’ market valuations are closest to Sandy Spring Bancorp Inc. (NASDAQ:SASR)’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PGI 16 72381 2
VHI 4 809 -2
WIN 11 46601 -10
UEIC 11 13409 3

As you can see, these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $33 million. Premiere Global Services, Inc. (NYSE:PGI) is the most popular stock in this table. On the other hand, Valhi, Inc. (NYSE:VHI) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Sandy Spring Bancorp Inc. (NASDAQ:SASR) is even less popular than Valhi, Inc. (NYSE:VHI). Considering that hedge funds aren’t fond of this stock, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.