The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded West Bancorporation, Inc. (NASDAQ:WTBA) based on those filings.
West Bancorporation, Inc. (NASDAQ:WTBA) was in 4 hedge funds’ portfolios at the end of March. WTBA shareholders have witnessed a decrease in activity from the world’s largest hedge funds lately. There were 6 hedge funds in our database with WTBA holdings at the end of the previous quarter. Our calculations also showed that WTBA 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 financial world there are a lot of tools market participants can use to assess publicly traded companies. A couple of the less utilized tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the elite fund managers can outpace the broader indices by a solid amount (see the details here).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. 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 S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s take a look at the key hedge fund action regarding West Bancorporation, Inc. (NASDAQ:WTBA).
Hedge fund activity in West Bancorporation, Inc. (NASDAQ:WTBA)
At Q1’s end, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -33% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in WTBA over the last 18 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Renaissance Technologies, holds the biggest position in West Bancorporation, Inc. (NASDAQ:WTBA). Renaissance Technologies has a $6.7 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second most bullish fund manager is Israel Englander of Millennium Management, with a $0.5 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that are bullish contain David Harding’s Winton Capital Management, Ken Griffin’s Citadel Investment Group and . In terms of the portfolio weights assigned to each position Winton Capital Management allocated the biggest weight to West Bancorporation, Inc. (NASDAQ:WTBA), around 0.01% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, earmarking 0.01 percent of its 13F equity portfolio to WTBA.
Because West Bancorporation, Inc. (NASDAQ:WTBA) has faced bearish sentiment from the smart money, it’s easy to see that there was a specific group of money managers who were dropping their full holdings heading into Q4. Interestingly, Richard Driehaus’s Driehaus Capital sold off the largest investment of all the hedgies monitored by Insider Monkey, valued at about $0.5 million in stock. Peter Rathjens, Bruce Clarke and John Campbell’s fund, Arrowstreet Capital, also dropped its stock, about $0.3 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 2 funds heading into Q4.
Let’s now review hedge fund activity in other stocks similar to West Bancorporation, Inc. (NASDAQ:WTBA). We will take a look at Sierra Bancorp (NASDAQ:BSRR), Genco Shipping & Trading Limited (NYSE:GNK), Pioneer Bancorp, Inc. (NASDAQ:PBFS), and Red River Bancshares, Inc. (NASDAQ:RRBI). This group of stocks’ market values match WTBA’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 5.75 hedge funds with bullish positions and the average amount invested in these stocks was $37 million. That figure was $8 million in WTBA’s case. Genco Shipping & Trading Limited (NYSE:GNK) is the most popular stock in this table. On the other hand Red River Bancshares, Inc. (NASDAQ:RRBI) is the least popular one with only 2 bullish hedge fund positions. West Bancorporation, Inc. (NASDAQ:WTBA) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 8.3% in 2020 through the end of May and surpassed the market by 13.2 percentage points. Unfortunately WTBA wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); WTBA investors were disappointed as the stock returned 9.2% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.