Is QCR Holdings, Inc. (NASDAQ:QCRH) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before doing days of research on it. Given their 2 and 20 payment structure, hedge funds have more resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also have numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
QCR Holdings, Inc. (NASDAQ:QCRH) has experienced a decrease in hedge fund interest recently. 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 Capital City Bank Group, Inc. (NASDAQ:CCBG), U.S. Lime & Minerals Inc. (NASDAQ:USLM), and Galena Biopharma Inc (NASDAQ:GALE) to gather more data points.
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At the moment, there are a lot of methods investors have at their disposal to value their holdings. Two of the most innovative methods are hedge fund and insider trading signals. We have shown that, historically, those who follow the best picks of the top hedge fund managers can outperform the broader indices by a superb amount (see the details here).
Keeping this in mind, let’s go over the recent action encompassing QCR Holdings, Inc. (NASDAQ:QCRH).
What have hedge funds been doing with QCR Holdings, Inc. (NASDAQ:QCRH)?
At the end of the third quarter, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 13% from the second quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Paul Magidson, Jonathan Cohen. And Ostrom Enders’s Castine Capital Management has the biggest position in QCR Holdings, Inc. (NASDAQ:QCRH), worth close to $10.3 million, accounting for 4.7% of its total 13F portfolio. The second largest stake is held by Endicott Management, managed by Robert I. Usdan and Wayne K. Goldstein, which holds a $6.5 million position; 2.4% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that hold long positions consist of Tom Brown’s Second Curve Capital, Fred Cummings’ Elizabeth Park Capital Management, and Renaissance Technologies.
Because QCR Holdings, Inc. (NASDAQ:QCRH) has experienced a bearish sentiment from the aggregate hedge fund industry, we can see that there lies a certain “tier” of hedgies that slashed their entire stakes last quarter. At the top of the heap, Ken Griffin’s Citadel Investment Group said goodbye to the largest stake of the 700 funds watched by Insider Monkey, totaling about $0.7 million in stock, and Mike Vranos’s Ellington was right behind this move, as the fund cut about $0.2 million worth of shares. These transactions are interesting, as total hedge fund interest was cut by 1 fund last quarter.
Let’s also examine hedge fund activity in other stocks similar to QCR Holdings, Inc. (NASDAQ:QCRH). We will take a look at Capital City Bank Group, Inc. (NASDAQ:CCBG), U.S. Lime & Minerals Inc. (NASDAQ:USLM), Galena Biopharma Inc (NASDAQ:GALE), and Career Education Corp. (NASDAQ:CECO). This group of stocks’ market valuations matches QCR Holdings, Inc. (NASDAQ:QCRH)’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CCBG | 5 | 3173 | 0 |
| USLM | 4 | 3430 | 1 |
| GALE | 4 | 2735 | -1 |
| CECO | 13 | 48003 | -3 |
As you can see, these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $14 million. That figure was $27 million in QCR Holdings, Inc. (NASDAQ:QCRH)’s case. Career Education Corp. (NASDAQ:CECO) is the most popular stock in this table. On the other hand, U.S. Lime & Minerals Inc. (NASDAQ:USLM) is the least popular one with only 4 bullish hedge fund positions. QCR Holdings, Inc. (NASDAQ:QCRH) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Career Education Corp. (NASDAQ:CECO) might be a better candidate to consider a long position.