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 Bar Harbor Bankshares (NYSE:BHB)?
Bar Harbor Bankshares (NYSE:BHB) was in 4 hedge funds' portfolios at the end of the first quarter of 2020. BHB investors should pay attention to a decrease in hedge fund interest in recent months. There were 5 hedge funds in our database with BHB holdings at the end of the previous quarter. Our calculations also showed that BHB 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.
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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 44 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. 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 S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we're going to view the latest hedge fund action regarding Bar Harbor Bankshares (NYSE:BHB).
How have hedgies been trading Bar Harbor Bankshares (NYSE:BHB)?
At Q1's end, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of -20% from the fourth quarter of 2019. By comparison, 3 hedge funds held shares or bullish call options in BHB a year ago. With the smart money's capital changing hands, there exists an "upper tier" of key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies has the biggest position in Bar Harbor Bankshares (NYSE:BHB), worth close to $4.5 million, corresponding to less than 0.1%% of its total 13F portfolio. Coming in second is Chuck Royce of Royce & Associates, with a $1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other professional money managers that hold long positions encompass Bernard Horn's Polaris Capital Management, Ken Griffin's Citadel Investment Group and . In terms of the portfolio weights assigned to each position Polaris Capital Management allocated the biggest weight to Bar Harbor Bankshares (NYSE:BHB), around 0.05% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, designating 0.01 percent of its 13F equity portfolio to BHB.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Arrowstreet Capital. 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 none of the 750+ hedge funds tracked by Insider Monkey identified BHB as a viable investment and initiated a position in the stock.
Let's also examine hedge fund activity in other stocks similar to Bar Harbor Bankshares (NYSE:BHB). We will take a look at Northern Oil & Gas, Inc. (NYSE:NOG), West Bancorporation, Inc. (NASDAQ:WTBA), Sierra Bancorp (NASDAQ:BSRR), and Genco Shipping & Trading Limited (NYSE:GNK). All of these stocks' market caps are similar to BHB's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NOG,12,33650,-9 WTBA,4,7660,-2 BSRR,5,9535,-3 GNK,12,135482,-4 Average,8.25,46582,-4.5 [/table]
As you can see these stocks had an average of 8.25 hedge funds with bullish positions and the average amount invested in these stocks was $47 million. That figure was $6 million in BHB's case. Northern Oil & Gas, Inc. (NYSE:NOG) is the most popular stock in this table. On the other hand West Bancorporation, Inc. (NASDAQ:WTBA) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Bar Harbor Bankshares (NYSE:BHB) is even less popular than WTBA. Hedge funds dodged a bullet by taking a bearish stance towards BHB. 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 BHB wasn't nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); BHB investors were disappointed as the stock returned 15.6% 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.
