Hedge Funds Are Buying U.S. Bancorp (USB)

U.S. Bancorp (NYSE:USB) has seen a boost in hedge fund ownership of late. Check out the details.

In the eyes of many traders, hedge funds are seen as useless, outdated investment tools of a forgotten age. Although there are over 8,000 hedge funds with their doors open in present day, Insider Monkey focuses on the bigwigs of this group, close to 525 funds. It is widely held that this group oversees the majority of the hedge fund industry’s total assets, and by paying attention to their highest quality stock picks, we’ve identified a few investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year 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 trumped the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).

Just as useful, bullish insider trading activity is a second way to analyze the financial markets. There are many stimuli for an upper level exec to sell shares of his or her company, but only one, very obvious reason why they would buy. Several empirical studies have demonstrated the market-beating potential of this method if “monkeys” understand where to look (learn more here).

Furthermore, it’s important to analyze the newest info about U.S. Bancorp (NYSE:USB).

What have hedge funds been doing with U.S. Bancorp (NYSE:USB)?

At Q2’s end, a total of 48 of the hedge funds we track were long in this stock, a change of 12% from one quarter earlier. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were upping their holdings considerably.

Out of the hedge funds we follow, Berkshire Hathaway, managed by Warren Buffett, holds the biggest position in U.S. Bancorp (NYSE:USB). Berkshire Hathaway has a $2.8297 billion position in the stock, comprising 3.2% of its 13F portfolio. Sitting at the No. 2 spot is Yacktman Asset Management, managed by Donald Yacktman, which held a $462 million position; the fund has 2.2% of its 13F portfolio invested in the stock. Other peers that hold long positions include Matt McLennan’s First Eagle Investment Management, Ken Griffin’s Citadel Investment Group and Natixis Global Asset Management’s Harris Associates.

Consequently, certain money managers were breaking ground themselves. Berkshire Hathaway, managed by Warren Buffett, assembled the most outsized position in U.S. Bancorp (NYSE:USB). Berkshire Hathaway had 2.8297 billion invested in the company at the end of the quarter. Donald Yacktman’s Yacktman Asset Management also made a $462 million investment in the stock during the quarter. The other funds with new positions in the stock are Matt McLennan’s First Eagle Investment Management, Ken Griffin’s Citadel Investment Group, and Phill Gross and Robert Atchinson’s Adage Capital Management.

What do corporate executives and insiders think about U.S. Bancorp (NYSE:USB)?

Bullish insider trading is at its handiest when the primary stock in question has seen transactions within the past 180 days. Over the last half-year time frame, U.S. Bancorp (NYSE:USB) has experienced zero unique insiders purchasing, and 17 insider sales (see the details of insider trades here).

We’ll also take a look at the relationship between both of these indicators in other stocks similar to U.S. Bancorp (NYSE:USB). These stocks are Associated Banc Corp (NASDAQ:ASBC), TFS Financial Corporation (NASDAQ:TFSL), Huntington Bancshares Incorporated (NASDAQ:HBAN), Comerica Incorporated (NYSE:CMA), and Fifth Third Bancorp (NASDAQ:FITB). This group of stocks belong to the regional – midwest banks industry and their market caps match USB’s market cap.

Using the results explained by Insider Monkey’s studies, regular investors must always keep one eye on hedge fund and insider trading sentiment, and U.S. Bancorp (NYSE:USB) applies perfectly to this mantra.

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