With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter. One of these stocks was Stock Yards Bancorp, Inc. (NASDAQ:SYBT).
Stock Yards Bancorp, Inc. (NASDAQ:SYBT) has experienced a decrease in hedge fund interest lately. SYBT was in 6 hedge funds’ portfolios at the end of June. There were 7 hedge funds in our database with SYBT positions at the end of the previous quarter. Our calculations also showed that SYBT isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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. Let’s take a peek at the fresh hedge fund action regarding Stock Yards Bancorp, Inc. (NASDAQ:SYBT).
How have hedgies been trading Stock Yards Bancorp, Inc. (NASDAQ:SYBT)?
At the end of the second quarter, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -14% from the first quarter of 2019. On the other hand, there were a total of 9 hedge funds with a bullish position in SYBT a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Stock Yards Bancorp, Inc. (NASDAQ:SYBT), with a stake worth $9.6 million reported as of the end of March. Trailing Renaissance Technologies was D E Shaw, which amassed a stake valued at $1.2 million. Two Sigma Advisors, Driehaus Capital, and AQR Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.
Judging by the fact that Stock Yards Bancorp, Inc. (NASDAQ:SYBT) has witnessed bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there was a specific group of funds that decided to sell off their entire stakes by the end of the second quarter. Interestingly, Roger Ibbotson’s Zebra Capital Management sold off the largest investment of the 750 funds watched by Insider Monkey, worth about $0.2 million in stock. Gavin Saitowitz and Cisco J. del Valle’s fund, Springbok Capital, also dumped its stock, about $0 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 1 funds by the end of the second quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Stock Yards Bancorp, Inc. (NASDAQ:SYBT) but similarly valued. We will take a look at Systemax Inc. (NYSE:SYX), Origin Bancorp, Inc. (NASDAQ:OBNK), Quanterix Corporation (NASDAQ:QTRX), and Lakeland Bancorp, Inc. (NASDAQ:LBAI). All of these stocks’ market caps are closest to SYBT’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.5 hedge funds with bullish positions and the average amount invested in these stocks was $34 million. That figure was $13 million in SYBT’s case. Systemax Inc. (NYSE:SYX) is the most popular stock in this table. On the other hand Origin Bancorp, Inc. (NASDAQ:OBNK) is the least popular one with only 4 bullish hedge fund positions. Stock Yards Bancorp, Inc. (NASDAQ:SYBT) 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 SYBT, though not to the same extent, as the stock returned 2.2% during the third quarter and outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.