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.
Hedge fund interest in The Bancorp, Inc. (NASDAQ:TBBK) 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 Telenav Inc (NASDAQ:TNAV), Eaton Vance Senior Income Trust (NYSE:EVF), and Ultra Clean Holdings Inc (NASDAQ:UCTT) to gather more data points.
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.
Keeping this in mind, let’s go over the new action surrounding The Bancorp, Inc. (NASDAQ:TBBK).
What have hedge funds been doing with The Bancorp, Inc. (NASDAQ:TBBK)?
Heading into the fourth quarter of 2016, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in TBBK over the last 5 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.
Of the funds tracked by Insider Monkey, Nantahala Capital Management, led by Wilmot B. Harkey and Daniel Mack, holds the number one position in The Bancorp, Inc. (NASDAQ:TBBK). Nantahala Capital Management has a $27.2 million position in the stock, comprising 3.3% of its 13F portfolio. Coming in second is Second Curve Capital, led by Tom Brown, holding a $15.4 million position; the fund has 8.8% of its 13F portfolio invested in the stock. Remaining members of the smart money that hold long positions contain Robert I. Usdan and Wayne K. Goldstein’s Endicott Management, David Brown’s Hawk Ridge Management and Michael Price’s MFP Investors. We should note that two of these hedge funds (Nantahala Capital Management and MFP Investors) 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.