Is Flagstar Bancorp Inc (NYSE:FBC) an excellent investment now? Prominent investors are becoming more confident. The number of long hedge fund positions went up by 6 lately.
In the eyes of most shareholders, hedge funds are seen as worthless, old investment tools of years past. While there are greater than 8000 funds trading at the moment, we choose to focus on the upper echelon of this group, close to 450 funds. It is estimated that this group oversees most of the smart money’s total asset base, and by keeping an eye on their top picks, we have unearthed a number of investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Equally as key, bullish insider trading activity is a second way to parse down the investments you’re interested in. Just as you’d expect, there are a variety of incentives for a bullish insider to cut shares of his or her company, but just one, very clear reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the useful potential of this strategy if “monkeys” know where to look (learn more here).
Keeping this in mind, it’s important to take a peek at the latest action encompassing Flagstar Bancorp Inc (NYSE:FBC).
How have hedgies been trading Flagstar Bancorp Inc (NYSE:FBC)?
At year’s end, a total of 14 of the hedge funds we track were long in this stock, a change of 75% from the previous quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings substantially.
According to our comprehensive database, Harvest Capital Strategies, managed by Joseph A. Jolson, holds the most valuable position in Flagstar Bancorp Inc (NYSE:FBC). Harvest Capital Strategies has a $6 million position in the stock, comprising 1.1% of its 13F portfolio. Sitting at the No. 2 spot is Raptor Capital Management, managed by James Pallotta, which held a $5.1 million position; the fund has 3.1% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include Timothy S. Peterson’s Regiment Capital, Geoffrey Raynor’s Q Investments (Specter Holdings) and D. E. Shaw’s D E Shaw.
With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. Harvest Capital Strategies, managed by Joseph A. Jolson, established the most outsized position in Flagstar Bancorp Inc (NYSE:FBC). Harvest Capital Strategies had 6 million invested in the company at the end of the quarter. James Pallotta’s Raptor Capital Management also made a $5.1 million investment in the stock during the quarter. The following funds were also among the new FBC investors: Timothy S. Peterson’s Regiment Capital, Geoffrey Raynor’s Q Investments (Specter Holdings), and D. E. Shaw’s D E Shaw.
What do corporate executives and insiders think about Flagstar Bancorp Inc (NYSE:FBC)?
Insider buying is most useful when the company in question has seen transactions within the past half-year. Over the last six-month time frame, Flagstar Bancorp Inc (NYSE:FBC) has seen 1 unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Flagstar Bancorp Inc (NYSE:FBC). These stocks are Brookline Bancorp, Inc. (NASDAQ:BRKL), Berkshire Hills Bancorp, Inc. (NYSE:BHLB), Provident Financial Services, Inc. (NYSE:PFS), Kearny Financial Corp. (NASDAQ:KRNY), and Columbia Banking System Inc (NASDAQ:COLB). This group of stocks belong to the savings & loans industry and their market caps are similar to FBC’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Brookline Bancorp, Inc. (NASDAQ:BRKL) | 10 | 0 | 0 |
| Berkshire Hills Bancorp, Inc. (NYSE:BHLB) | 6 | 1 | 2 |
| Provident Financial Services, Inc. (NYSE:PFS) | 6 | 3 | 1 |
| Kearny Financial Corp. (NASDAQ:KRNY) | 5 | 1 | 3 |
| Columbia Banking System Inc (NASDAQ:COLB) | 7 | 2 | 1 |
With the results shown by Insider Monkey’s time-tested strategies, everyday investors must always pay attention to hedge fund and insider trading activity, and Flagstar Bancorp Inc (NYSE:FBC) shareholders fit into this picture quite nicely.
