There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other elite funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze First Citizens BancShares Inc. (NASDAQ:FCNCA).
First Citizens BancShares Inc. (NASDAQ:FCNCA) was in 9 hedge funds’ portfolios at the end of September. FCNCA investors should pay attention to a decrease in enthusiasm from smart money in recent months. There were 10 hedge funds in our database with FCNCA holdings at the end of the previous quarter. 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 Piedmont Office Realty Trust, Inc. (NYSE:PDM), American Greetings Corporation (NYSE:AM), and Associated Banc Corp (NYSE:ASB) to gather more data points.
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Now, let’s take a glance at the recent action regarding First Citizens BancShares Inc. (NASDAQ:FCNCA).
What does the smart money think about First Citizens BancShares Inc. (NASDAQ:FCNCA)?
Heading into Q4, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -10% from the second quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Royce & Associates, managed by Chuck Royce, holds the biggest position in First Citizens BancShares Inc. (NASDAQ:FCNCA). Royce & Associates has a $47.4 million position in the stock, comprising 0.3% of its 13F portfolio. Coming in second is Joe Huber of Huber Capital Management, with a $41.2 million position; the fund has 1.4% of its 13F portfolio invested in the stock. Remaining peers that hold long positions include Thomas E. Claugus’s GMT Capital, Paul J. Isaac’s Arbiter Partners Capital Management and Matthew Lindenbaum’s Basswood Capital.
Since First Citizens BancShares Inc. (NASDAQ:FCNCA) has witnessed bearish sentiment from hedge fund managers, it’s easy to see that there is a sect of money managers who sold off their positions entirely heading into Q4. Interestingly, Peter Muller’s PDT Partners cut the largest stake of the 700 funds followed by Insider Monkey, totaling close to $0.7 million in stock, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners was right behind this move, as the fund dropped about $0.4 million worth. These transactions are important to note, as total hedge fund interest fell by 1 funds heading into Q4.
Let’s check out hedge fund activity in other stocks similar to First Citizens BancShares Inc. (NASDAQ:FCNCA). We will take a look at Piedmont Office Realty Trust, Inc. (NYSE:PDM), American Greetings Corporation (NYSE:AM), Associated Banc Corp (NYSE:ASB), and Papa John’s Int’l, Inc. (NASDAQ:PZZA). All of these stocks’ market caps are closest to FCNCA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PDM | 7 | 141889 | -4 |
| AM | 5 | 11103 | -1 |
| ASB | 12 | 142833 | 1 |
| PZZA | 12 | 113907 | -1 |
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 $102 million. That figure was $125 million in FCNCA’s case. Associated Banc Corp (NYSE:ASB) is the most popular stock in this table. On the other hand American Greetings Corporation (NYSE:AM) is the least popular one with only 5 bullish hedge fund positions. First Citizens BancShares Inc. (NASDAQ:FCNCA) is not the least popular stock in this group but hedge fund interest is just average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ASB might be a better candidate to consider a long position.
