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Should You Avoid Origin Bancorp, Inc. (OBNK)?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. What do these smart investors think about Origin Bancorp, Inc. (NASDAQ:OBNK)?

Origin Bancorp, Inc. (NASDAQ:OBNK) shareholders have witnessed a decrease in enthusiasm from smart money of late. Our calculations also showed that OBNK 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 today’s marketplace there are a large number of gauges stock traders employ to appraise stocks. Two of the most underrated gauges are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the top picks of the elite hedge fund managers can outclass the S&P 500 by a healthy margin (see the details here).

New York Stock Exchange

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. 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 the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s view the new hedge fund action encompassing Origin Bancorp, Inc. (NASDAQ:OBNK).

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

At the end of the first quarter, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -38% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards OBNK over the last 18 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Mendon Capital Advisors was the largest shareholder of Origin Bancorp, Inc. (NASDAQ:OBNK), with a stake worth $7.8 million reported as of the end of September. Trailing Mendon Capital Advisors was Citadel Investment Group, which amassed a stake valued at $1.1 million. Renaissance Technologies, Millennium Management, and Winton Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Mendon Capital Advisors allocated the biggest weight to Origin Bancorp, Inc. (NASDAQ:OBNK), around 3.85% of its 13F portfolio. Winton Capital Management is also relatively very bullish on the stock, designating 0.01 percent of its 13F equity portfolio to OBNK.

Judging by the fact that Origin Bancorp, Inc. (NASDAQ:OBNK) has experienced declining sentiment from hedge fund managers, it’s easy to see that there is a sect of hedgies who sold off their entire stakes heading into Q4. At the top of the heap, Mark Lee’s Forest Hill Capital cut the largest investment of the 750 funds monitored by Insider Monkey, worth close to $2.5 million in stock. Peter Muller’s fund, PDT Partners, also sold off its stock, about $0.2 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 3 funds heading into Q4.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Origin Bancorp, Inc. (NASDAQ:OBNK) but similarly valued. These stocks are Dine Brands Global, Inc. (NYSE:DIN), M/I Homes Inc (NYSE:MHO), Himax Technologies, Inc. (NASDAQ:HIMX), and Dime Community Bancshares, Inc. (NASDAQ:DCOM). 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
DIN 21 71501 1
MHO 16 46205 -4
HIMX 9 30979 5
DCOM 10 37714 0
Average 14 46600 0.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $47 million. That figure was $11 million in OBNK’s case. Dine Brands Global, Inc. (NYSE:DIN) is the most popular stock in this table. On the other hand Himax Technologies, Inc. (NASDAQ:HIMX) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Origin Bancorp, Inc. (NASDAQ:OBNK) is even less popular than HIMX. Hedge funds dodged a bullet by taking a bearish stance towards OBNK. Our calculations showed that the top 10 most popular hedge fund stocks 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 but managed to beat the market by 13.2 percentage points. Unfortunately OBNK wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); OBNK investors were disappointed as the stock returned 3.6% during the second quarter (through the end of May) 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 so far in 2020.

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