Are Hedge Funds Done Buying SVB Financial Group (SIVB)?

After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of June 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards SVB Financial Group (NASDAQ:SIVB).

SVB Financial Group (NASDAQ:SIVB) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 49 hedge funds’ portfolios at the end of the second quarter of 2021. Our calculations also showed that SIVB isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Public Service Enterprise Group Incorporated (NYSE:PEG), Sun Life Financial Inc. (NYSE:SLF), and Ecopetrol S.A. (NYSE:EC) to gather more data points.

If you’d ask most investors, hedge funds are assumed to be worthless, outdated financial tools of years past. While there are more than 8000 funds with their doors open at the moment, We hone in on the crème de la crème of this club, approximately 850 funds. These investment experts oversee most of the hedge fund industry’s total capital, and by following their best picks, Insider Monkey has found a number of investment strategies that have historically exceeded the market. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website .

Louis Bacon Moore of Moore Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV 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. Keeping this in mind we’re going to take a gander at the latest hedge fund action surrounding SVB Financial Group (NASDAQ:SIVB).

Do Hedge Funds Think SIVB Is A Good Stock To Buy Now?

At second quarter’s end, a total of 49 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in SIVB over the last 24 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).

More specifically, Fisher Asset Management was the largest shareholder of SVB Financial Group (NASDAQ:SIVB), with a stake worth $358.5 million reported as of the end of June. Trailing Fisher Asset Management was Diamond Hill Capital, which amassed a stake valued at $120.7 million. AQR Capital Management, PEAK6 Capital Management, and Citadel Investment Group were 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 Azora Capital allocated the biggest weight to SVB Financial Group (NASDAQ:SIVB), around 3.46% of its 13F portfolio. EJF Capital is also relatively very bullish on the stock, setting aside 1.99 percent of its 13F equity portfolio to SIVB.

Judging by the fact that SVB Financial Group (NASDAQ:SIVB) has faced a decline in interest from the smart money, logic holds that there exists a select few hedge funds who were dropping their positions entirely heading into Q3. At the top of the heap, Frank Fu’s CaaS Capital dumped the largest investment of the “upper crust” of funds tracked by Insider Monkey, totaling close to $31.6 million in stock. Joseph Samuels’s fund, Islet Management, also said goodbye to its stock, about $30.5 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s check out hedge fund activity in other stocks similar to SVB Financial Group (NASDAQ:SIVB). We will take a look at Public Service Enterprise Group Incorporated (NYSE:PEG), Sun Life Financial Inc. (NYSE:SLF), Ecopetrol S.A. (NYSE:EC), Nokia Corporation (NYSE:NOK), Nasdaq, Inc. (NASDAQ:NDAQ), Fastenal Company (NASDAQ:FAST), and Willis Towers Watson Public Limited Company (NASDAQ:WLTW). This group of stocks’ market valuations resemble SIVB’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 26.7 hedge funds with bullish positions and the average amount invested in these stocks was $1073 million. That figure was $1039 million in SIVB’s case. Willis Towers Watson Public Limited Company (NASDAQ:WLTW) is the most popular stock in this table. On the other hand Ecopetrol S.A. (NYSE:EC) is the least popular one with only 6 bullish hedge fund positions. SVB Financial Group (NASDAQ:SIVB) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SIVB is 68.6. 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 22.9% in 2021 through October 1st and still beat the market by 5.6 percentage points. Hedge funds were also right about betting on SIVB as the stock returned 19.4% since the end of Q2 (through 10/1) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

Suggested Articles:

• 10 Best Whiskey and Alcohol Stocks to Buy in 2021
• 10 Best Dividend Stocks to Buy and Hold According to Tiger Cub Lee Ainslie
• 10 Best Spring Stocks to Buy Now

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