Sandy Spring Bancorp Inc. (SASR) Hedge Funds Are Snapping Up

Reputable billionaire investors such as Nelson Peltz and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.

Is Sandy Spring Bancorp Inc. (NASDAQ:SASR) ready to rally soon? Investors who are in the know are altogether betting on the stock. The number of bullish hedge fund investments moved up by 2 lately. SASR was in 8 hedge funds’ portfolios at the end of the third quarter of 2016. There were 6 hedge funds in our database with SASR holdings at the end of the previous quarter. At the end of this article we will also compare SASR to other stocks including ORBCOMM Inc (NASDAQ:ORBC), Perficient, Inc. (NASDAQ:PRFT), and Investors Real Estate Trust (NYSE:IRET) to get a better sense of its popularity.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

How have hedgies been trading Sandy Spring Bancorp Inc. (NASDAQ:SASR)?

Heading into the fourth quarter of 2016, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, up by 33% from the second quarter of 2016. By comparison, 7 hedge funds held shares or bullish call options in SASR heading into this year. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, one of the largest hedge funds in the world, has the biggest position in Sandy Spring Bancorp Inc. (NASDAQ:SASR), worth close to $7.9 million. Sitting at the No. 2 spot is Mark Lee of Forest Hill Capital, with a $7.7 million position; 3.8% of its 13F portfolio is allocated to the stock. Remaining professional money managers that are bullish comprise Cliff Asness’ AQR Capital Management, and Ken Griffin’s Citadel Investment Group. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

As aggregate interest increased, key hedge funds have been driving this bullishness. Millennium Management assembled the most valuable position in Sandy Spring Bancorp Inc. (NASDAQ:SASR). Millennium Management had $1.1 million invested in the company at the end of the quarter. Citadel Investment Group also initiated a $0.4 million position during the quarter. The following funds were also among the new SASR investors: Glenn Russell Dubin’s Highbridge Capital Management and D. E. Shaw’s D E Shaw.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Sandy Spring Bancorp Inc. (NASDAQ:SASR) but similarly valued. We will take a look at ORBCOMM Inc (NASDAQ:ORBC), Perficient, Inc. (NASDAQ:PRFT), Investors Real Estate Trust (NYSE:IRET), and Leju Holdings Ltd (ADR) (NYSE:LEJU). This group of stocks’ market caps match SASR’s market cap.

As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $40 million. That figure was $19 million in SASR’s case. ORBCOMM Inc (NASDAQ:ORBC) is the most popular stock in this table. On the other hand Leju Holdings Ltd (ADR) (NYSE:LEJU) is the least popular one with only 4 bullish hedge fund positions. Sandy Spring Bancorp Inc. (NASDAQ:SASR) 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. In this regard ORBC might be a better candidate to consider taking a long position in.

Disclosure: None