Stocks, especially the once high flying technology stocks, had a lousy start to the new year. QQQ lost 9% of its value in January. We aren’t certain about the bubbly technology stocks that trade for ridiculously high multiples of their revenues, but we believe top hedge fund stocks will deliver positive returns for the rest of the year. In this article, we will take a closer look at hedge fund sentiment towards Signature Bank (NASDAQ:SBNY) at the end of the third quarter and determine whether the smart money was really smart about this stock.
Signature Bank (NASDAQ:SBNY) investors should be aware of an increase in hedge fund sentiment lately. Signature Bank (NASDAQ:SBNY) was in 46 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic was previously 43. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that SBNY isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind we’re going to take a look at the fresh hedge fund action encompassing Signature Bank (NASDAQ:SBNY).
Robert Pohly of Samlyn Capital
Do Hedge Funds Think SBNY Is A Good Stock To Buy Now?
At third quarter’s end, a total of 46 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 7% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in SBNY over the last 25 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, Citadel Investment Group, managed by Ken Griffin, holds the most valuable position in Signature Bank (NASDAQ:SBNY). Citadel Investment Group has a $107.2 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by Samlyn Capital, managed by Robert Pohly, which holds a $63.9 million position; 0.9% of its 13F portfolio is allocated to the stock. Some other hedge funds and institutional investors with similar optimism contain Emanuel J. Friedman’s EJF Capital, Steve Cohen’s Point72 Asset Management and Phill Gross and Robert Atchinson’s Adage Capital Management. In terms of the portfolio weights assigned to each position Toscafund Asset Management allocated the biggest weight to Signature Bank (NASDAQ:SBNY), around 20.2% of its 13F portfolio. Engle Capital is also relatively very bullish on the stock, earmarking 9.11 percent of its 13F equity portfolio to SBNY.
With a general bullishness amongst the heavyweights, specific money managers were breaking ground themselves. Junto Capital Management, managed by James Parsons, initiated the largest position in Signature Bank (NASDAQ:SBNY). Junto Capital Management had $56.3 million invested in the company at the end of the quarter. Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners also initiated a $21.4 million position during the quarter. The other funds with brand new SBNY positions are Fred Cummings’s Elizabeth Park Capital Management, Josh Donfeld and David Rogers’s Castle Hook Partners, and Gregg Moskowitz’s Interval Partners.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Signature Bank (NASDAQ:SBNY) but similarly valued. We will take a look at PPD, Inc. (NASDAQ:PPD), EXACT Sciences Corporation (NASDAQ:EXAS), Markel Corporation (NYSE:MKL), Viatris Inc. (NASDAQ:VTRS), Westinghouse Air Brake Technologies Corporation (NYSE:WAB), Conagra Brands, Inc. (NYSE:CAG), and Coupa Software Incorporated (NASDAQ:COUP). This group of stocks’ market values are similar to SBNY’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PPD | 37 | 1890261 | 0 |
| EXAS | 40 | 1984372 | 5 |
| MKL | 25 | 689937 | -8 |
| VTRS | 55 | 1466403 | 2 |
| WAB | 38 | 2982164 | -8 |
| CAG | 20 | 625323 | -9 |
| COUP | 52 | 4542300 | -2 |
| Average | 38.1 | 2025823 | -2.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 38.1 hedge funds with bullish positions and the average amount invested in these stocks was $2026 million. That figure was $951 million in SBNY’s case. Viatris Inc. (NASDAQ:VTRS) is the most popular stock in this table. On the other hand Conagra Brands, Inc. (NYSE:CAG) is the least popular one with only 20 bullish hedge fund positions. Signature Bank (NASDAQ:SBNY) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SBNY is 75.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and still beat the market by 3.6 percentage points. Hedge funds were also right about betting on SBNY as the stock returned 12.3% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
