In this article we will check out the progression of hedge fund sentiment towards Meridian Corporation (NASDAQ:MRBK) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Meridian Corporation (NASDAQ:MRBK) shareholders have witnessed an increase in activity from the world's largest hedge funds of late. Meridian Corporation (NASDAQ:MRBK) was in 5 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 7. There were 3 hedge funds in our database with MRBK holdings at the end of December. Our calculations also showed that MRBK isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
To most market participants, hedge funds are viewed as worthless, outdated investment vehicles of yesteryear. While there are more than 8000 funds with their doors open at the moment, We choose to focus on the upper echelon of this group, approximately 850 funds. These money managers orchestrate the majority of the hedge fund industry's total asset base, and by keeping an eye on their highest performing stock picks, Insider Monkey has spotted numerous investment strategies that have historically outstripped the S&P 500 index. Insider Monkey's flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Michael Price MFP Investors
Michael Price of MFP Investors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery 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. 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 homepage. Keeping this in mind we're going to take a glance at the key hedge fund action regarding Meridian Corporation (NASDAQ:MRBK).
Do Hedge Funds Think MRBK Is A Good Stock To Buy Now?
At the end of March, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 67% from one quarter earlier. By comparison, 7 hedge funds held shares or bullish call options in MRBK a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, MFP Investors held the most valuable stake in Meridian Corporation (NASDAQ:MRBK), which was worth $7 million at the end of the fourth quarter. On the second spot was Renaissance Technologies which amassed $1.5 million worth of shares. Ancora Advisors, Arrowstreet Capital, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position MFP Investors allocated the biggest weight to Meridian Corporation (NASDAQ:MRBK), around 0.84% of its 13F portfolio. Ancora Advisors is also relatively very bullish on the stock, designating 0.02 percent of its 13F equity portfolio to MRBK.
With a general bullishness amongst the heavyweights, some big names were leading the bulls' herd. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, initiated the most valuable position in Meridian Corporation (NASDAQ:MRBK). Arrowstreet Capital had $0.4 million invested in the company at the end of the quarter. Ken Griffin's Citadel Investment Group also made a $0.3 million investment in the stock during the quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Meridian Corporation (NASDAQ:MRBK) but similarly valued. These stocks are Cherry Hill Mortgage Investment Corp (NYSE:CHMI), Fennec Pharmaceuticals Inc. (NASDAQ:FENC), Bank7 Corp. (NASDAQ:BSVN), First Savings Financial Group, Inc. (NASDAQ:FSFG), Palatin Technologies, Inc. (NYSE:PTN), GSI Technology, Inc. (NASDAQ:GSIT), and OP Bancorp (NASDAQ:OPBK). All of these stocks' market caps match MRBK's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CHMI,4,11164,-3 FENC,6,62743,0 BSVN,2,789,0 FSFG,3,3568,1 PTN,2,192,-4 GSIT,5,17753,1 OPBK,6,12290,2 Average,4,15500,-0.4 [/table]
As you can see these stocks had an average of 4 hedge funds with bullish positions and the average amount invested in these stocks was $15 million. That figure was $10 million in MRBK's case. Fennec Pharmaceuticals Inc. (NASDAQ:FENC) is the most popular stock in this table. On the other hand Bank7 Corp. (NASDAQ:BSVN) is the least popular one with only 2 bullish hedge fund positions. Meridian Corporation (NASDAQ:MRBK) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MRBK is 65.9. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. 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 17.4% in 2021 through June 18th and beat the market again by 6.1 percentage points. Unfortunately MRBK wasn't nearly as popular as these 5 stocks and hedge funds that were betting on MRBK were disappointed as the stock returned 2% since the end of March (through 6/18) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Get real-time email alerts: Follow Meridian Corp (NASDAQ:MRBK)
Disclosure: None. This article was originally published at Insider Monkey.
