Howard Bancorp Inc (HBMD) Fell Out Of Favor With Hedge Funds

Asma UL Husna
·6 min read

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 817 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 September 30th, about a month before the elections. In this article we look at what those investors think of Howard Bancorp Inc (NASDAQ:HBMD).

Howard Bancorp Inc (NASDAQ:HBMD) investors should pay attention to a decrease in hedge fund sentiment lately. Howard Bancorp Inc (NASDAQ:HBMD) was in 4 hedge funds' portfolios at the end of September. The all time high for this statistics is 6. Our calculations also showed that HBMD 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 the average investor there are dozens of gauges shareholders employ to value publicly traded companies. A couple of the less utilized gauges are hedge fund and insider trading signals. We have shown that, historically, those who follow the best picks of the top hedge fund managers can beat the broader indices by a significant amount (see the details here).

Anton Schutz of Mendon Capital Advisors

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 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 go over the recent hedge fund action surrounding Howard Bancorp Inc (NASDAQ:HBMD).

How have hedgies been trading Howard Bancorp Inc (NASDAQ:HBMD)?

At third quarter's end, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -20% from the previous quarter. On the other hand, there were a total of 3 hedge funds with a bullish position in HBMD a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Anton Schutz's Mendon Capital Advisors has the number one position in Howard Bancorp Inc (NASDAQ:HBMD), worth close to $4.8 million, corresponding to 2.8% of its total 13F portfolio. The second largest stake is held by Phil Stone of Fourthstone LLC, with a $3.3 million position; the fund has 2.7% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish include Fred Cummings's Elizabeth Park Capital Management, Renaissance Technologies and . In terms of the portfolio weights assigned to each position Mendon Capital Advisors allocated the biggest weight to Howard Bancorp Inc (NASDAQ:HBMD), around 2.82% of its 13F portfolio. Fourthstone LLC is also relatively very bullish on the stock, earmarking 2.74 percent of its 13F equity portfolio to HBMD.

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Millennium Management. 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 HBMD as a viable investment and initiated a position in the stock.

Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Howard Bancorp Inc (NASDAQ:HBMD) but similarly valued. These stocks are Iteris Inc (NASDAQ:ITI), Centennial Resource Development, Inc. (NASDAQ:CDEV), KVH Industries, Inc. (NASDAQ:KVHI), Tiptree Inc. (NASDAQ:TIPT), Oil States International, Inc. (NYSE:OIS), Sol-Gel Technologies Ltd. (NASDAQ:SLGL), and Universal Technical Institute, Inc. (NYSE:UTI). This group of stocks' market caps are closest to HBMD's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ITI,11,19098,-2 CDEV,14,20635,-6 KVHI,4,4825,0 TIPT,3,842,1 OIS,12,10351,-1 SLGL,2,6172,-1 UTI,14,39515,2 Average,8.6,14491,-1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 8.6 hedge funds with bullish positions and the average amount invested in these stocks was $14 million. That figure was $11 million in HBMD's case. Centennial Resource Development, Inc. (NASDAQ:CDEV) is the most popular stock in this table. On the other hand Sol-Gel Technologies Ltd. (NASDAQ:SLGL) is the least popular one with only 2 bullish hedge fund positions. Howard Bancorp Inc (NASDAQ:HBMD) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for HBMD is 32.3. 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 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on HBMD as the stock returned 38.1% since the end of the third quarter (through 11/27) and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.

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