Do Hedge Funds and Insiders Love Fifth Third Bancorp (FITB)?

Fifth Third Bancorp (NASDAQ:FITB) investors should be aware of a decrease in support from the world’s most elite money managers in recent months.

In the eyes of most investors, hedge funds are viewed as unimportant, old financial vehicles of yesteryear. While there are over 8000 funds with their doors open at the moment, we at Insider Monkey look at the upper echelon of this club, about 450 funds. Most estimates calculate that this group controls the majority of all hedge funds’ total capital, and by watching their highest performing stock picks, we have discovered a number of investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Equally as important, bullish insider trading activity is a second way to parse down the stock market universe. Just as you’d expect, there are lots of stimuli for a bullish insider to cut shares of his or her company, but only one, very clear reason why they would buy. Various empirical studies have demonstrated the useful potential of this tactic if you know what to do (learn more here).

Keeping this in mind, we’re going to take a gander at the latest action regarding Fifth Third Bancorp (NASDAQ:FITB).

Hedge fund activity in Fifth Third Bancorp (NASDAQ:FITB)

In preparation for this quarter, a total of 26 of the hedge funds we track were bullish in this stock, a change of -13% from the first quarter. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes meaningfully.

When looking at the hedgies we track, Bill Miller’s Legg Mason Capital Management had the most valuable position in Fifth Third Bancorp (NASDAQ:FITB), worth close to $100.7 million, accounting for 1.8% of its total 13F portfolio. The second largest stake is held by Renaissance Technologies, managed by Jim Simons, which held a $78.4 million position; 0.2% of its 13F portfolio is allocated to the stock. Remaining peers that are bullish include Israel Englander’s Millennium Management, Richard S. Pzena’s Pzena Investment Management and Cliff Asness’s AQR Capital Management.

Due to the fact that Fifth Third Bancorp (NASDAQ:FITB) has faced a declination in interest from the aggregate hedge fund industry, it’s safe to say that there exists a select few fund managers that slashed their entire stakes in Q1. Interestingly, John Brennan’s Sirios Capital Management sold off the largest position of the “upper crust” of funds we track, comprising an estimated $12.1 million in stock.. Patrik Brummer’s fund, Zenit Asset Management AB, also cut its stock, about $6.4 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 4 funds in Q1.

What do corporate executives and insiders think about Fifth Third Bancorp (NASDAQ:FITB)?

Insider trading activity, especially when it’s bullish, is particularly usable when the primary stock in question has seen transactions within the past half-year. Over the last half-year time frame, Fifth Third Bancorp (NASDAQ:FITB) has experienced zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Fifth Third Bancorp (NASDAQ:FITB). These stocks are Associated Banc Corp (NASDAQ:ASBC), U.S. Bancorp (NYSE:USB), TFS Financial Corporation (NASDAQ:TFSL), Huntington Bancshares Incorporated (NASDAQ:HBAN), and Comerica Incorporated (NYSE:CMA). All of these stocks are in the regional – midwest banks industry and their market caps resemble FITB’s market cap.