Hedge Funds Are Betting On WesBanco, Inc. (WSBC)

Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.

Is WesBanco, Inc. (NASDAQ:WSBC) going to take off soon? The best stock pickers are really taking a bullish view. The number of bullish hedge fund positions rose by 1 recently. WSBC was in 7 hedge funds’ portfolios at the end of September. There were 6 hedge funds in our database with WSBC holdings at the end of the previous quarter. At the end of this article we will also compare WSBC to other stocks including Shake Shack Inc (NYSE:SHAK), Stratasys, Ltd. (NASDAQ:SSYS), and Cempra Inc (NASDAQ:CEMP) to get a better sense of its popularity.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

Kevin George/Shutterstock.com

Keeping this in mind, we’re going to go over the latest action encompassing WesBanco, Inc. (NASDAQ:WSBC).

What does the smart money think about WesBanco, Inc. (NASDAQ:WSBC)?

Heading into the fourth quarter of 2016, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, up 17% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in WSBC over the last 5 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, one of the largest hedge funds in the world, has the largest position in WesBanco, Inc. (NASDAQ:WSBC), worth close to $10.4 million, amounting to less than 0.1% of its total 13F portfolio. Coming in second is Zebra Capital Management, led by Roger Ibbotson, holding a $1.8 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism consist of Ken Griffin’s Citadel Investment Group, Cliff Asness’s AQR Capital Management and Israel Englander’s Millennium Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

As aggregate interest increased, key money managers were breaking ground themselves. Citadel Investment Group, led by Ken Griffin, assembled the biggest position in WesBanco, Inc. (NASDAQ:WSBC). According to its latest 13F filing, the fund had $1.6 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $0.5 million investment in the stock during the quarter.

Let’s now take a look at hedge fund activity in other stocks similar to WesBanco, Inc. (NASDAQ:WSBC). These stocks are Shake Shack Inc (NYSE:SHAK), Stratasys, Ltd. (NASDAQ:SSYS), Cempra Inc (NASDAQ:CEMP), and Adams Diversified Equity Fund Inc (NYSE:ADX). All of these stocks’ market caps resemble WSBC’s market cap.

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $100 million. That figure was $17 million in WSBC’s case. Stratasys, Ltd. (NASDAQ:SSYS) is the most popular stock in this table. On the other hand Adams Diversified Equity Fund Inc (NYSE:ADX) is the least popular one with only 4 bullish hedge fund positions. WesBanco, Inc. (NASDAQ:WSBC) is not the least popular stock in this group but hedge fund interest is still below 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 SSYS might be a better candidate to consider taking a long position in.

Disclosure: none.