Do Hedge Funds and Insiders Love Wintrust Financial Corp (WTFC)?

Is Wintrust Financial Corp (NASDAQ:WTFC) a safe investment now? Prominent investors are getting more bullish. The number of bullish hedge fund positions went up by 7 in recent months.

According to most stock holders, hedge funds are seen as underperforming, old investment tools of yesteryear. While there are over 8000 funds trading today, we at Insider Monkey hone in on the moguls of this club, close to 450 funds. Most estimates calculate that this group has its hands on the lion’s share of the smart money’s total asset base, and by tracking their top stock picks, we have uncovered a number of investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually 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 outpaced the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Equally as key, positive insider trading sentiment is another way to break down the world of equities. Just as you’d expect, there are lots of reasons for a corporate insider to downsize shares of his or her company, but only one, very clear reason why they would buy. Many empirical studies have demonstrated the impressive potential of this method if “monkeys” understand what to do (learn more here).

Keeping this in mind, let’s take a gander at the latest action regarding Wintrust Financial Corp (NASDAQ:WTFC).

What does the smart money think about Wintrust Financial Corp (NASDAQ:WTFC)?

Heading into Q2, a total of 15 of the hedge funds we track were bullish in this stock, a change of 88% from the previous quarter.

As industrywide interest jumped, key money managers were leading the bulls’ herd. Renaissance Technologies, managed by Jim Simons, created the most valuable position in Wintrust Financial Corp (NASDAQ:WTFC). Renaissance Technologies had 6.3 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also initiated a $2.1 million position during the quarter. The other funds with brand new WTFC positions are Matthew Lindenbaum’s Basswood Capital, Glenn Russell Dubin’s Highbridge Capital Management, and D. E. Shaw’s D E Shaw.

What have insiders been doing with Wintrust Financial Corp (NASDAQ:WTFC)?

Insider trading activity, especially when it’s bullish, is particularly usable when the company we’re looking at has experienced transactions within the past six months. Over the latest 180-day time period, Wintrust Financial Corp (NASDAQ:WTFC) has experienced zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Wintrust Financial Corp (NASDAQ:WTFC). These stocks are Firstmerit Corp (NASDAQ:FMER), PrivateBancorp Inc (NASDAQ:PVTB), MB Financial, Inc. (NASDAQ:MBFI), and Old National Bancorp (NYSE:ONB). This group of stocks are the members of the regional – midwest banks industry and their market caps are similar to WTFC’s market cap.

With the returns shown by our strategies, retail investors should always pay attention to hedge fund and insider trading sentiment, and Wintrust Financial Corp (NASDAQ:WTFC) shareholders fit into this picture quite nicely.

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