Is Texas Capital Bancshares Inc (NASDAQ:TCBI) going to take off soon? Investors who are in the know are in a bullish mood. The number of bullish hedge fund bets improved by 9 lately.
If you’d ask most investors, hedge funds are seen as worthless, outdated financial vehicles of yesteryear. While there are greater than 8000 funds with their doors open at the moment, we at Insider Monkey choose to focus on the elite of this group, about 450 funds. It is estimated that this group controls the lion’s share of all hedge funds’ total capital, and by keeping an eye on their best picks, we have revealed a number of investment strategies that have historically outstripped the broader indices. 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 began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Equally as important, bullish insider trading activity is another way to parse down the marketplace. There are a variety of stimuli for a bullish insider to drop shares of his or her company, but only one, very simple reason why they would behave bullishly. Various empirical studies have demonstrated the useful potential of this strategy if shareholders know where to look (learn more here).
Keeping this in mind, let’s take a gander at the recent action encompassing Texas Capital Bancshares Inc (NASDAQ:TCBI).
Hedge fund activity in Texas Capital Bancshares Inc (NASDAQ:TCBI)
At the end of the first quarter, a total of 18 of the hedge funds we track held long positions in this stock, a change of 100% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their holdings meaningfully.
When looking at the hedgies we track, Ken Griffin’s Citadel Investment Group had the largest position in Texas Capital Bancshares Inc (NASDAQ:TCBI), worth close to $35.7 million, comprising 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Ken Fisher of Fisher Asset Management, with a $26.5 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism include Clint Carlson’s Carlson Capital, Jim Simons’s Renaissance Technologies and Israel Englander’s Millennium Management.
As one would reasonably expect, key money managers have been driving this bullishness. Carlson Capital, managed by Clint Carlson, initiated the most valuable position in Texas Capital Bancshares Inc (NASDAQ:TCBI). Carlson Capital had 11.9 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also initiated a $11.1 million position during the quarter. The other funds with new positions in the stock are Ken Gray and Steve Walsh’s Bryn Mawr Capital, D. E. Shaw’s D E Shaw, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Insider trading activity in Texas Capital Bancshares Inc (NASDAQ:TCBI)
Insider trading activity, especially when it’s bullish, is particularly usable when the company in question has experienced transactions within the past half-year. Over the last half-year time frame, Texas Capital Bancshares Inc (NASDAQ:TCBI) has experienced 1 unique insiders buying, and 7 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Texas Capital Bancshares Inc (NASDAQ:TCBI). These stocks are Commerce Bancshares, Inc. (NASDAQ:CBSH), Prosperity Bancshares, Inc. (NYSE:PB), UMB Financial Corporation (NASDAQ:UMBF), International Bancshares Corp (NASDAQ:IBOC), and First Financial Bankshares Inc (NASDAQ:FFIN). This group of stocks are the members of the regional – southwest banks industry and their market caps are closest to TCBI’s market cap.
