The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards ServisFirst Bancshares, Inc. (NASDAQ:SFBS).
Is SFBS a good stock to buy now? Hedge funds were getting less bullish. The number of bullish hedge fund positions decreased by 1 lately. ServisFirst Bancshares, Inc. (NASDAQ:SFBS) was in 8 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistics is 12. Our calculations also showed that SFBS 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).
Video: Watch our video about the top 5 most popular hedge fund stocks.
To most stock holders, hedge funds are seen as underperforming, outdated financial vehicles of years past. While there are over 8000 funds trading today, We look at the crème de la crème of this club, about 850 funds. It is estimated that this group of investors orchestrate the lion's share of the smart money's total asset base, and by monitoring their unrivaled picks, Insider Monkey has brought to light several investment strategies that have historically beaten Mr. Market. Insider Monkey's flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
Nathaniel August - Mangrove Partners
Nathaniel August of Mangrove Partners
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 5 best cheap stocks to buy according to Ray Dalio to identify stocks with upside potential. 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 we're going to take a look at the fresh hedge fund action regarding ServisFirst Bancshares, Inc. (NASDAQ:SFBS).
Hedge fund activity in ServisFirst Bancshares, Inc. (NASDAQ:SFBS)
Heading into the fourth quarter of 2020, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of -11% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in SFBS over the last 21 quarters. With hedge funds' sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
Is SFBS A Good Stock To Buy?
The largest stake in ServisFirst Bancshares, Inc. (NASDAQ:SFBS) was held by Fisher Asset Management, which reported holding $1.7 million worth of stock at the end of September. It was followed by Mangrove Partners with a $1.5 million position. Other investors bullish on the company included Interval Partners, GAMCO Investors, and AQR Capital Management. In terms of the portfolio weights assigned to each position Mangrove Partners allocated the biggest weight to ServisFirst Bancshares, Inc. (NASDAQ:SFBS), around 0.19% of its 13F portfolio. Interval Partners is also relatively very bullish on the stock, designating 0.05 percent of its 13F equity portfolio to SFBS.
Since ServisFirst Bancshares, Inc. (NASDAQ:SFBS) has faced declining sentiment from the aggregate hedge fund industry, we can see that there is a sect of hedge funds who sold off their entire stakes by the end of the third quarter. It's worth mentioning that Fred Cummings's Elizabeth Park Capital Management said goodbye to the biggest stake of all the hedgies monitored by Insider Monkey, comprising an estimated $4.9 million in stock. David Harding's fund, Winton Capital Management, also cut its stock, about $3.2 million worth. These moves are interesting, as total hedge fund interest fell by 1 funds by the end of the third quarter.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as ServisFirst Bancshares, Inc. (NASDAQ:SFBS) but similarly valued. We will take a look at Madrigal Pharmaceuticals, Inc. (NASDAQ:MDGL), Sanmina Corporation (NASDAQ:SANM), Rogers Corporation (NYSE:ROG), Prestige Consumer Healthcare Inc. (NYSE:PBH), GrafTech International Ltd. (NYSE:EAF), TC Pipelines, LP (NYSE:TCP), and Cubic Corporation (NYSE:CUB). This group of stocks' market caps are similar to SFBS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MDGL,15,507679,0 SANM,15,135028,-5 ROG,19,94135,6 PBH,17,110462,-3 EAF,26,145437,2 TCP,3,2859,1 CUB,19,118395,6 Average,16.3,159142,1 [/table]
As you can see these stocks had an average of 16.3 hedge funds with bullish positions and the average amount invested in these stocks was $159 million. That figure was $6 million in SFBS's case. GrafTech International Ltd. (NYSE:EAF) is the most popular stock in this table. On the other hand TC Pipelines, LP (NYSE:TCP) is the least popular one with only 3 bullish hedge fund positions. ServisFirst Bancshares, Inc. (NASDAQ:SFBS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SFBS is 34.9. 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. 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 31.6% in 2020 through December 2nd and still beat the market by 16 percentage points. A small number of hedge funds were also right about betting on SFBS as the stock returned 14.1% since the end of the third quarter (through 12/2) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
