Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Capital Bancorp, Inc. (NASDAQ:CBNK), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is CBNK a good stock to buy? Capital Bancorp, Inc. (NASDAQ:CBNK) investors should pay attention to an increase in enthusiasm from smart money in recent months. Capital Bancorp, Inc. (NASDAQ:CBNK) was in 3 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 3. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 2 hedge funds in our database with CBNK holdings at the end of December. Our calculations also showed that CBNK isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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. Hedge funds have more than $3.5 trillion in assets under management, so you can't expect their entire portfolios to beat the market by large margins. 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 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds' moves today.
Roger Ibbotson of Zebra Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stockfor $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. Now we're going to take a look at the latest hedge fund action encompassing Capital Bancorp, Inc. (NASDAQ:CBNK).
Do Hedge Funds Think CBNK Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of 50% from one quarter earlier. On the other hand, there were a total of 2 hedge funds with a bullish position in CBNK a year ago. With hedgies' sentiment swirling, there exists a few notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
Among these funds, Fourthstone LLC held the most valuable stake in Capital Bancorp, Inc. (NASDAQ:CBNK), which was worth $5.9 million at the end of the fourth quarter. On the second spot was Renaissance Technologies which amassed $0.7 million worth of shares. Zebra Capital Management was 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 Fourthstone LLC allocated the biggest weight to Capital Bancorp, Inc. (NASDAQ:CBNK), around 2.92% of its 13F portfolio. Zebra Capital Management is also relatively very bullish on the stock, designating 0.24 percent of its 13F equity portfolio to CBNK.
Consequently, some big names were leading the bulls' herd. Zebra Capital Management, managed by Roger Ibbotson, assembled the biggest position in Capital Bancorp, Inc. (NASDAQ:CBNK). Zebra Capital Management had $0.2 million invested in the company at the end of the quarter.
Let's now take a look at hedge fund activity in other stocks similar to Capital Bancorp, Inc. (NASDAQ:CBNK). We will take a look at CNFinance Holdings Limited (NYSE:CNF), Ovid Therapeutics Inc. (NASDAQ:OVID), Protective Insurance Corporation (NASDAQ:PTVCB), NGL Energy Partners LP (NYSE:NGL), Northrim BanCorp, Inc. (NASDAQ:NRIM), Checkmate Pharmaceuticals, Inc. (NASDAQ:CMPI), and DIRTT Environmental Solutions Ltd. (NASDAQ:DRTT). This group of stocks' market caps are closest to CBNK's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CNF,2,148,2 OVID,14,72077,-2 PTVCB,11,27196,6 NGL,5,4968,3 NRIM,7,11997,-3 CMPI,2,22994,-1 DRTT,4,51002,-1 Average,6.4,27197,0.6 [/table]
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 $27 million. That figure was $7 million in CBNK's case. Ovid Therapeutics Inc. (NASDAQ:OVID) is the most popular stock in this table. On the other hand CNFinance Holdings Limited (NYSE:CNF) is the least popular one with only 2 bullish hedge fund positions. Capital Bancorp, Inc. (NASDAQ:CBNK) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CBNK is 40.2. 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 17.2% in 2021 through June 11th and beat the market by 3.3 percentage points. A small number of hedge funds were also right about betting on CBNK, though not to the same extent, as the stock returned 8.1% since the end of Q1 (through June 11th) and outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.
