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Origin Bancorp, Inc. (OBNK): Hedge Funds In Wait-and-See Mode

We are still in an overall bull market and many stocks that smart money investors were piling into surged through October 17th. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 45% and 39% respectively. Hedge funds’ top 3 stock picks returned 34.4% this year and beat the S&P 500 ETFs by 13 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Origin Bancorp, Inc. (NASDAQ:OBNK).

Hedge fund interest in Origin Bancorp, Inc. (NASDAQ:OBNK) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Delek Logistics Partners LP (NYSE:DKL), Banco Latinoamericano de Comercio Exterior, S.A. (NYSE:BLX), and Lindblad Expeditions Holdings Inc (NASDAQ:LIND) to gather more data points. Our calculations also showed that OBNK isn’t among the 30 most popular stocks among hedge funds (see the video below).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

In the financial world there are dozens of indicators shareholders use to appraise publicly traded companies. A duo of the less known indicators are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the elite fund managers can outperform the S&P 500 by a healthy amount (see the details here).

OBNK_oct2019

Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to take a gander at the recent hedge fund action regarding Origin Bancorp, Inc. (NASDAQ:OBNK).

How are hedge funds trading Origin Bancorp, Inc. (NASDAQ:OBNK)?

At the end of the second quarter, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. By comparison, 5 hedge funds held shares or bullish call options in OBNK a year ago. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).

Izzy Englander of MILLENNIUM MANAGEMENT

When looking at the institutional investors followed by Insider Monkey, Anton Schutz’s Mendon Capital Advisors has the most valuable position in Origin Bancorp, Inc. (NASDAQ:OBNK), worth close to $18.7 million, corresponding to 2.9% of its total 13F portfolio. Sitting at the No. 2 spot is Forest Hill Capital, led by Mark Lee, holding a $4.3 million position; the fund has 1.5% of its 13F portfolio invested in the stock. Some other peers with similar optimism encompass Israel Englander’s Millennium Management, Renaissance Technologies and .

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: PDT Partners. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Renaissance Technologies).

Let’s now take a look at hedge fund activity in other stocks similar to Origin Bancorp, Inc. (NASDAQ:OBNK). We will take a look at Delek Logistics Partners LP (NYSE:DKL), Banco Latinoamericano de Comercio Exterior, S.A. (NYSE:BLX), Lindblad Expeditions Holdings Inc (NASDAQ:LIND), and ACCO Brands Corporation (NYSE:ACCO). This group of stocks’ market caps resemble OBNK’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
DKL 1 2994 0
BLX 1 6963 0
LIND 15 190272 -5
ACCO 16 37871 -2
Average 8.25 59525 -1.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 8.25 hedge funds with bullish positions and the average amount invested in these stocks was $60 million. That figure was $25 million in OBNK’s case. ACCO Brands Corporation (NYSE:ACCO) is the most popular stock in this table. On the other hand Delek Logistics Partners LP (NYSE:DKL) is the least popular one with only 1 bullish hedge fund positions. Origin Bancorp, Inc. (NASDAQ:OBNK) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. A small number of hedge funds were also right about betting on OBNK, though not to the same extent, as the stock returned 2.5% during the third quarter and outperformed the market.

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

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