At Insider Monkey, we pore over the filings of nearly 817 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not Select Interior Concepts, Inc. (NASDAQ:SIC) makes for a good investment right now.
Is SIC a good stock to buy now? Money managers were buying. The number of bullish hedge fund bets increased by 1 in recent months. Select Interior Concepts, Inc. (NASDAQ:SIC) was in 17 hedge funds’ portfolios at the end of September. The all time high for this statistic is 17. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that SIC 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.
In the 21st century investor’s toolkit there are many tools stock traders employ to evaluate stocks. A duo of the most innovative tools are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the best picks of the top investment managers can outclass the S&P 500 by a very impressive amount (see the details here).
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. Keeping this in mind we’re going to take a gander at the latest hedge fund action surrounding Select Interior Concepts, Inc. (NASDAQ:SIC).
Do Hedge Funds Think SIC Is A Good Stock To Buy Now?
At Q3’s end, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 6% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in SIC over the last 21 quarters. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Wilmot B. Harkey and Daniel Mack’s Nantahala Capital Management has the biggest position in Select Interior Concepts, Inc. (NASDAQ:SIC), worth close to $14.2 million, corresponding to 0.4% of its total 13F portfolio. Sitting at the No. 2 spot is Divisar Capital, led by Steven Baughman, holding a $6.4 million position; 2.1% of its 13F portfolio is allocated to the company. Remaining peers that hold long positions include Brett Hendrickson’s Nokomis Capital, Steve Pei’s Gratia Capital and Renaissance Technologies. In terms of the portfolio weights assigned to each position Gratia Capital allocated the biggest weight to Select Interior Concepts, Inc. (NASDAQ:SIC), around 3.03% of its 13F portfolio. Divisar Capital is also relatively very bullish on the stock, earmarking 2.1 percent of its 13F equity portfolio to SIC.
As one would reasonably expect, key money managers were breaking ground themselves. SG Capital Management, managed by Ken Grossman and Glen Schneider, created the biggest position in Select Interior Concepts, Inc. (NASDAQ:SIC). SG Capital Management had $0.9 million invested in the company at the end of the quarter. Ali Motamed’s Invenomic Capital Management also initiated a $0.4 million position during the quarter.
Let’s now review hedge fund activity in other stocks similar to Select Interior Concepts, Inc. (NASDAQ:SIC). We will take a look at Atlantic Power Corp (NYSE:AT), IDT Corporation (NYSE:IDT), Mohawk Group Holdings, Inc. (NASDAQ:MWK), FS Bancorp, Inc. (NASDAQ:FSBW), Aurora Mobile Limited (NASDAQ:JG), Sky Solar Holdings, Ltd. (NASDAQ:SKYS), and Taiwan Liposome Company, Ltd. (NASDAQ:TLC). All of these stocks’ market caps are similar to SIC’s market cap.
|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 4.4 hedge funds with bullish positions and the average amount invested in these stocks was $8 million. That figure was $30 million in SIC’s case. Atlantic Power Corp (NYSE:AT) is the most popular stock in this table. On the other hand Aurora Mobile Limited (NASDAQ:JG) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Select Interior Concepts, Inc. (NASDAQ:SIC) is more popular among hedge funds. Our overall hedge fund sentiment score for SIC is 86. 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 returned 30.7% in 2020 through December 14th but still managed to beat the market by 15.8 percentage points. Hedge funds were also right about betting on SIC as the stock returned 11.4% since the end of September (through 12/14) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.