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. We at Insider Monkey have plowed through 817 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, about a month before the elections. In this article we look at what those investors think of First Eagle Alternative Capital BDC, Inc. (NASDAQ:FCRD).
Hedge fund interest in First Eagle Alternative Capital BDC, Inc. (NASDAQ:FCRD) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that FCRD isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). At the end of this article we will also compare FCRD to other stocks including Galmed Pharmaceuticals Ltd (NASDAQ:GLMD), Armstrong Flooring, Inc. (NYSE:AFI), and Consumer Portfolio Services, Inc. (NASDAQ:CPSS) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are dozens of tools shareholders can use to grade publicly traded companies. Two of the most innovative tools are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the best picks of the best hedge fund managers can trounce the S&P 500 by a superb amount (see the details here).
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind let’s view the key hedge fund action surrounding First Eagle Alternative Capital BDC, Inc. (NASDAQ:FCRD).
How are hedge funds trading First Eagle Alternative Capital BDC, Inc. (NASDAQ:FCRD)?
At the end of September, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the second quarter of 2020. By comparison, 7 hedge funds held shares or bullish call options in FCRD a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Omega Advisors, managed by Leon Cooperman, holds the largest position in First Eagle Alternative Capital BDC, Inc. (NASDAQ:FCRD). Omega Advisors has a $7.1 million position in the stock, comprising 0.7% of its 13F portfolio. On Omega Advisors’s heels is Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which holds a $0.8 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other members of the smart money with similar optimism contain Emanuel J. Friedman’s EJF Capital, D. E. Shaw’s D E Shaw and John Overdeck and David Siegel’s Two Sigma Advisors. In terms of the portfolio weights assigned to each position Omega Advisors allocated the biggest weight to First Eagle Alternative Capital BDC, Inc. (NASDAQ:FCRD), around 0.7% of its 13F portfolio. EJF Capital is also relatively very bullish on the stock, earmarking 0.06 percent of its 13F equity portfolio to FCRD.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: 999. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Omega Advisors).
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as First Eagle Alternative Capital BDC, Inc. (NASDAQ:FCRD) but similarly valued. These stocks are Galmed Pharmaceuticals Ltd (NASDAQ:GLMD), Armstrong Flooring, Inc. (NYSE:AFI), Consumer Portfolio Services, Inc. (NASDAQ:CPSS), Issuer Direct Corporation (NYSE:ISDR), Kitov Pharma Ltd. (NASDAQ:KTOV), Hill International Inc (NYSE:HIL), and Evolution Petroleum Corporation (NYSE:EPM). This group of stocks’ market caps match FCRD’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 6.4 hedge funds with bullish positions and the average amount invested in these stocks was $10 million. That figure was $9 million in FCRD’s case. Armstrong Flooring, Inc. (NYSE:AFI) is the most popular stock in this table. On the other hand Consumer Portfolio Services, Inc. (NASDAQ:CPSS) is the least popular one with only 1 bullish hedge fund positions. First Eagle Alternative Capital BDC, Inc. (NASDAQ:FCRD) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for FCRD is 47.7. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on FCRD as the stock returned 51.2% since the end of the third quarter (through 11/27) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.