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 821 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 March 31st, a week after the market trough. In this article we look at what those investors think of FRP Holdings Inc (NASDAQ:FRPH).
Is FRP Holdings Inc (NASDAQ:FRPH) ready to rally soon? Investors who are in the know are in a bearish mood. The number of long hedge fund bets shrunk by 1 in recent months. Our calculations also showed that FRPH 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.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Martin Whitman Third Avenue Management Marty Whitman
Martin Whitman of Third Avenue Management[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. 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 the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let's check out the latest hedge fund action surrounding FRP Holdings Inc (NASDAQ:FRPH).
How are hedge funds trading FRP Holdings Inc (NASDAQ:FRPH)?
At Q1's end, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -13% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards FRPH over the last 18 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Royce & Associates, managed by Chuck Royce, holds the number one position in FRP Holdings Inc (NASDAQ:FRPH). Royce & Associates has a $20.2 million position in the stock, comprising 0.3% of its 13F portfolio. On Royce & Associates's heels is Third Avenue Management, led by Martin Whitman, holding a $5.7 million position; 0.8% of its 13F portfolio is allocated to the company. Some other members of the smart money that are bullish contain Eric Sprott's Sprott Asset Management, Mark Travis's Intrepid Capital Management and Renaissance Technologies. In terms of the portfolio weights assigned to each position Intrepid Capital Management allocated the biggest weight to FRP Holdings Inc (NASDAQ:FRPH), around 2.1% of its 13F portfolio. Third Avenue Management is also relatively very bullish on the stock, dishing out 0.84 percent of its 13F equity portfolio to FRPH.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Marshall Wace LLP. 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 FRPH as a viable investment and initiated a position in the stock.
Let's check out hedge fund activity in other stocks similar to FRP Holdings Inc (NASDAQ:FRPH). These stocks are Bridge Bancorp, Inc. (NASDAQ:BDGE), Turning Point Brands, Inc. (NYSE:TPB), The Meet Group, Inc. (NASDAQ:MEET), and QuinStreet Inc (NASDAQ:QNST). This group of stocks' market valuations are similar to FRPH's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BDGE,7,60476,-3 TPB,14,48228,-2 MEET,21,96815,6 QNST,22,93394,4 Average,16,74728,1.25 [/table]
As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $75 million. That figure was $34 million in FRPH's case. QuinStreet Inc (NASDAQ:QNST) is the most popular stock in this table. On the other hand Bridge Bancorp, Inc. (NASDAQ:BDGE) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks FRP Holdings Inc (NASDAQ:FRPH) is even less popular than BDGE. Hedge funds dodged a bullet by taking a bearish stance towards FRPH. 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 13.9% in 2020 through June 10th but managed to beat the market by 14.2 percentage points. Unfortunately FRPH wasn't nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); FRPH investors were disappointed as the stock returned -1.5% during the second quarter (through June 10th) 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.
