With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was Seacoast Banking Corporation of Florida (NASDAQ:SBCF).
Is SBCF a good stock to buy now? Seacoast Banking Corporation of Florida (NASDAQ:SBCF) shareholders have witnessed an increase in activity from the world’s largest hedge funds lately. Seacoast Banking Corporation of Florida (NASDAQ:SBCF) was in 8 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 17. Our calculations also showed that SBCF 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.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 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 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. Now let’s check out the recent hedge fund action regarding Seacoast Banking Corporation of Florida (NASDAQ:SBCF).
What have hedge funds been doing with Seacoast Banking Corporation of Florida (NASDAQ:SBCF)?
At the end of September, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 14% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in SBCF over the last 21 quarters. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
The largest stake in Seacoast Banking Corporation of Florida (NASDAQ:SBCF) was held by Royce & Associates, which reported holding $2.8 million worth of stock at the end of September. It was followed by Arrowstreet Capital with a $2.1 million position. Other investors bullish on the company included Renaissance Technologies, Mendon Capital Advisors, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Mendon Capital Advisors allocated the biggest weight to Seacoast Banking Corporation of Florida (NASDAQ:SBCF), around 0.79% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, designating 0.03 percent of its 13F equity portfolio to SBCF.
Consequently, key money managers have been driving this bullishness. Renaissance Technologies, initiated the most valuable position in Seacoast Banking Corporation of Florida (NASDAQ:SBCF). Renaissance Technologies had $1.9 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $1 million investment in the stock during the quarter. The other funds with brand new SBCF positions are Israel Englander’s Millennium Management and Paul Tudor Jones’s Tudor Investment Corp.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Seacoast Banking Corporation of Florida (NASDAQ:SBCF) but similarly valued. These stocks are ePlus Inc. (NASDAQ:PLUS), StoneX Group Inc. (NASDAQ:SNEX), Tupperware Brands Corporation (NYSE:TUP), Eventbrite, Inc. (NYSE:EB), Nkarta, Inc. (NASDAQ:NKTX), KKR Real Estate Finance Trust Inc. (NYSE:KREF), and Trinseo S.A. (NYSE:TSE). This group of stocks’ market valuations match SBCF’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 13 hedge funds with bullish positions and the average amount invested in these stocks was $130 million. That figure was $10 million in SBCF’s case. Eventbrite, Inc. (NYSE:EB) is the most popular stock in this table. On the other hand KKR Real Estate Finance Trust Inc. (NYSE:KREF) is the least popular one with only 6 bullish hedge fund positions. Seacoast Banking Corporation of Florida (NASDAQ:SBCF) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SBCF is 26.4. 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 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 SBCF as the stock returned 46.6% since the end of the third quarter (through 12/2) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.