Is Stock Yards Bancorp, Inc. (SYBT) A Good Stock To Buy?

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Stock Yards Bancorp, Inc. (NASDAQ:SYBT).

Is Stock Yards Bancorp, Inc. (NASDAQ:SYBT) a sound investment right now? The smart money is reducing their bets on the stock. The number of bullish hedge fund positions were trimmed by 1 lately. Our calculations also showed that SYBT isn’t among the 30 most popular stocks among hedge funds (click for Q1 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 plenty of methods market participants can use to size up their stock investments. A pair of the most underrated methods are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the best picks of the elite money managers can outpace the market by a superb amount (see the details here).

David Harding

David Harding of Winton Capital Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s take a glance at the new hedge fund action encompassing Stock Yards Bancorp, Inc. (NASDAQ:SYBT).

Hedge fund activity in Stock Yards Bancorp, Inc. (NASDAQ:SYBT)

Heading into the second quarter of 2020, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a change of -13% from the previous quarter. The graph below displays the number of hedge funds with bullish position in SYBT over the last 18 quarters. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, holds the most valuable position in Stock Yards Bancorp, Inc. (NASDAQ:SYBT). Renaissance Technologies has a $8.9 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Winton Capital Management, managed by David Harding, which holds a $0.9 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other peers that hold long positions comprise Ken Griffin’s Citadel Investment Group, D. E. Shaw’s D E Shaw and Cliff Asness’s AQR Capital Management. In terms of the portfolio weights assigned to each position Winton Capital Management allocated the biggest weight to Stock Yards Bancorp, Inc. (NASDAQ:SYBT), around 0.02% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, dishing out 0.01 percent of its 13F equity portfolio to SYBT.

Due to the fact that Stock Yards Bancorp, Inc. (NASDAQ:SYBT) has witnessed bearish sentiment from the smart money, it’s easy to see that there lies a certain “tier” of funds who were dropping their positions entirely in the first quarter. Intriguingly, Richard Driehaus’s Driehaus Capital sold off the largest stake of the “upper crust” of funds monitored by Insider Monkey, valued at close to $0.5 million in stock, and Minhua Zhang’s Weld Capital Management was right behind this move, as the fund cut about $0.3 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 1 funds in the first quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Stock Yards Bancorp, Inc. (NASDAQ:SYBT). We will take a look at PetIQ, Inc. (NASDAQ:PETQ), Avita Medical Limited (NASDAQ:RCEL), Codexis, Inc. (NASDAQ:CDXS), and Amerant Bancorp Inc. (NASDAQ:AMTB). This group of stocks’ market valuations resemble SYBT’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PETQ 13 87376 -2
RCEL 3 32836 0
CDXS 8 151091 -2
AMTB 2 5943 0
Average 6.5 69312 -1

View table here if you experience formatting issues.

As you can see these stocks had an average of 6.5 hedge funds with bullish positions and the average amount invested in these stocks was $69 million. That figure was $12 million in SYBT’s case. PetIQ, Inc. (NASDAQ:PETQ) is the most popular stock in this table. On the other hand Amerant Bancorp Inc. (NASDAQ:AMTB) is the least popular one with only 2 bullish hedge fund positions. Stock Yards Bancorp, Inc. (NASDAQ:SYBT) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th but still beat the market by 14.2 percentage points. Hedge funds were also right about betting on SYBT, though not to the same extent, as the stock returned 25.8% during the first two months and ten days of the second quarter and outperformed the market as well.

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Disclosure: None. This article was originally published at Insider Monkey.