In this article we will check out the progression of hedge fund sentiment towards Home Bancorp, Inc. (NASDAQ:HBCP) 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.
Is Home Bancorp, Inc. (NASDAQ:HBCP) a buy right now? Prominent investors are becoming less confident. The number of long hedge fund bets dropped by 4 in recent months. Our calculations also showed that HBCP 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). HBCP was in 4 hedge funds' portfolios at the end of March. There were 8 hedge funds in our database with HBCP holdings at the end of the previous quarter. 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 72% since March 2017 and outperformed the S&P 500 ETFs by more than 44 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.
[caption id="attachment_189632" align="aligncenter" width="393"] David Harding of Winton Capital Management[/caption]
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. With all of this in mind let's check out the fresh hedge fund action regarding Home Bancorp, Inc. (NASDAQ:HBCP).
How have hedgies been trading Home Bancorp, Inc. (NASDAQ:HBCP)?
At the end of the first quarter, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -50% from the fourth quarter of 2019. By comparison, 3 hedge funds held shares or bullish call options in HBCP 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.
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, holds the biggest position in Home Bancorp, Inc. (NASDAQ:HBCP). Renaissance Technologies has a $5.3 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Renaissance Technologies's heels is Winton Capital Management, managed by David Harding, which holds a $0.4 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other peers that hold long positions contain Ken Griffin's Citadel Investment Group, John Overdeck and David Siegel's Two Sigma Advisors and . In terms of the portfolio weights assigned to each position Winton Capital Management allocated the biggest weight to Home Bancorp, Inc. (NASDAQ:HBCP), around 0.01% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, designating 0.01 percent of its 13F equity portfolio to HBCP.
Judging by the fact that Home Bancorp, Inc. (NASDAQ:HBCP) has faced declining sentiment from the smart money, we can see that there exists a select few hedge funds who were dropping their entire stakes in the third quarter. It's worth mentioning that Israel Englander's Millennium Management dumped the largest stake of the "upper crust" of funds followed by Insider Monkey, comprising close to $0.3 million in stock. Paul Marshall and Ian Wace's fund, Marshall Wace LLP, also said goodbye to its stock, about $0.3 million worth. These moves are important to note, as total hedge fund interest fell by 4 funds in the third quarter.
Let's go over hedge fund activity in other stocks similar to Home Bancorp, Inc. (NASDAQ:HBCP). These stocks are Greenlight Capital Re, Ltd. (NASDAQ:GLRE), Southern First Bancshares, Inc. (NASDAQ:SFST), Northwest Pipe Company (NASDAQ:NWPX), and Aduro BioTech Inc (NASDAQ:ADRO). This group of stocks' market caps resemble HBCP's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GLRE,7,5750,-7 SFST,5,18335,-2 NWPX,13,34829,0 ADRO,11,41439,2 Average,9,25088,-1.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $25 million. That figure was $6 million in HBCP's case. Northwest Pipe Company (NASDAQ:NWPX) is the most popular stock in this table. On the other hand Southern First Bancshares, Inc. (NASDAQ:SFST) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Home Bancorp, Inc. (NASDAQ:HBCP) is even less popular than SFST. Hedge funds dodged a bullet by taking a bearish stance towards HBCP. 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 HBCP wasn't nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); HBCP investors were disappointed as the stock returned -1.7% 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.
Disclosure: None. This article was originally published at Insider Monkey.