Hedge Funds Are Doubling Down On WSFS Financial Corporation (WSFS): What Do They See In This Stock?

It seems that the masses and most of the financial media hate hedge funds and what they do, but why is this hatred of hedge funds so prominent? At the end of the day, these asset management firms do not gamble the hard-earned money of the people who are on the edge of poverty. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. The S&P 500 Index gained 7.6% in the 12 month-period that ended November 21, while less than 49% of its stocks beat the benchmark. In contrast, the 30 most popular mid-cap stocks among the top hedge fund investors tracked by the Insider Monkey team returned 18% over the same period, which provides evidence that these money managers do have great stock picking abilities. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like WSFS Financial Corporation (NASDAQ:WSFS).

WSFS Financial Corporation (NASDAQ:WSFS) has experienced an increase in activity from the world’s largest hedge funds in recent months. 14 hedge funds that we track were long the stock on September 30. There were 12 hedge funds in our database with WSFS holdings at the end of the previous quarter. At the end of this article we will also compare WSFS to other stocks including Oxford Industries, Inc. (NYSE:OXM), Glaukos Corp (NYSE:GKOS), and Orion Engineered Carbons SA (NYSE:OEC) 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.

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What does the smart money think about WSFS Financial Corporation (NASDAQ:WSFS)?

Heading into the fourth quarter of 2016, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a gain of 17% from the previous quarter. Hedge fund ownership of the stock has now doubled over the last 2 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Jim Simons’ Renaissance Technologies has the biggest position in WSFS Financial Corporation (NASDAQ:WSFS), worth close to $39 million. Sitting at the No. 2 spot is Pzena Investment Management, led by Richard S. Pzena, holding a $21.5 million position. Remaining hedge funds and institutional investors with similar optimism include Israel Englander’s Millennium Management, Paul Hondros’ AlphaOne Capital Partners, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. 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, specific money managers have jumped into WSFS Financial Corporation (NASDAQ:WSFS) headfirst. Tudor Investment Corp, led by Paul Tudor Jones, initiated the most outsized position in WSFS Financial Corporation (NASDAQ:WSFS). Tudor Investment Corp had $0.6 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0.4 million investment in the stock during the quarter. The following funds were also among the new WSFS investors: Matthew Tewksbury’s Stevens Capital Management and Mike Vranos’ Ellington.

Let’s check out hedge fund activity in other stocks similar to WSFS Financial Corporation (NASDAQ:WSFS). These stocks are Oxford Industries, Inc. (NYSE:OXM), Glaukos Corp (NYSE:GKOS), Orion Engineered Carbons SA (NYSE:OEC), and Employers Holdings, Inc. (NYSE:EIG). This group of stocks’ market valuations match WSFS’s market valuation.

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $115 million. That figure was $79 million in WSFS’s case. Glaukos Corp (NYSE:GKOS) is the most popular stock in this table. On the other hand Employers Holdings, Inc. (NYSE:EIG) is the least popular one with only 10 bullish hedge fund positions. WSFS Financial Corporation (NASDAQ:WSFS) 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 GKOS might be a better candidate to consider taking a long position in.

Disclosure: None