According to most market participants, hedge funds are seen as underperforming, outdated financial tools of the past. While there are more than 8000 funds in operation at present, we at Insider Monkey hone in on the top tier of this group, about 450 funds. Most estimates calculate that this group controls the lion’s share of the smart money’s total asset base, and by watching their best picks, we have formulated a few investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year 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 outclassed the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).
Just as key, optimistic insider trading sentiment is another way to break down the world of equities. There are plenty of stimuli for an executive to get rid of shares of his or her company, but just one, very simple reason why they would behave bullishly. Several academic studies have demonstrated the valuable potential of this strategy if piggybackers understand what to do (learn more here).
Consequently, let’s take a look at the recent action encompassing Lakeland Financial Corporation (NASDAQ:LKFN).
What have hedge funds been doing with Lakeland Financial Corporation (NASDAQ:LKFN)?
At year’s end, a total of 6 of the hedge funds we track were long in this stock, a change of 50% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes substantially.
When looking at the hedgies we track, David Dreman’s Dreman Value Management had the biggest position in Lakeland Financial Corporation (NASDAQ:LKFN), worth close to $6 million, accounting for 0.2% of its total 13F portfolio. On Dreman Value Management’s heels is Renaissance Technologies, managed by Jim Simons, which held a $1 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining hedge funds that are bullish include Ken Gray and Steve Walsh’s Bryn Mawr Capital, John Overdeck and David Siegel’s Two Sigma Advisors and Cliff Asness’s AQR Capital Management.
As industrywide interest jumped, key hedge funds were breaking ground themselves. Bryn Mawr Capital, managed by Ken Gray and Steve Walsh, established the biggest position in Lakeland Financial Corporation (NASDAQ:LKFN). Bryn Mawr Capital had 0.6 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $0.3 million position during the quarter.
What have insiders been doing with Lakeland Financial Corporation (NASDAQ:LKFN)?
Insider purchases made by high-level executives is best served when the primary stock in question has experienced transactions within the past six months. Over the latest 180-day time frame, Lakeland Financial Corporation (NASDAQ:LKFN) has experienced 7 unique insiders purchasing, and 8 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Lakeland Financial Corporation (NASDAQ:LKFN). These stocks are First Busey Corporation (NASDAQ:BUSE), Wilshire Bancorp Inc (NASDAQ:WIBC), Taylor Capital Group Inc (NASDAQ:TAYC), First Financial Corp (NASDAQ:THFF), and First Merchants Corporation (NASDAQ:FRME). This group of stocks belong to the regional – midwest banks industry and their market caps match LKFN’s market cap.
