National Bank of Greece (ADR) (NBG)’s Shares Make Short-Lived Comeback After Third Greek Bailout

It is important to note that Greek banks have stayed closed for the past two weeks, with daily cash withdrawal limits of €60 or $66.34. The country has to repay $3.9 billion to the European Central Bank with July 20 set as the dues date.

It has been a difficult year for National Bank of Greece (ADR) (NYSE:NBG), whose shares have declined 32.96% year-to-date. Smart money has maintained a bearish outlook for the stock right from the first quarter of 2015, with only 13 hedge fund managers investing $60.84 million in the national bank on March 31 against investments of $79.43 million made by 17 hedge fund managers three months earlier. Emerging Sovereign Group, lead by Kevin Kenny, was the largest shareholder of the bank at the end of the first quarter with 13.22 million shares valued at $16.92 million.

Why are we interested in the 13F filings of a select group of hedge funds? We use these filings to determine the top 15 small-cap stocks held by these elite funds based on 16 years of research that showed their top small-cap picks are much more profitable than both their large-cap stocks and the broader market as a whole. These small-cap stocks beat the S&P 500 Total Return Index by an average of nearly one percentage point per month in our backtests, which were conducted over the period of 1999 to 2012. Moreover, since the beginning of forward testing from August 2012, the strategy worked just as our research predicted, outperforming the market every year and returning 135% over the last 34 months, which is more than 80 percentage points higher than the returns of the S&P 500 ETF (SPY) (see more details).

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