Hedge Funds Are Dumping BancorpSouth, Inc. (BXS)

BancorpSouth, Inc. (NYSE:BXS) has experienced a decrease in enthusiasm from smart money in recent months.

In the eyes of most market participants, hedge funds are viewed as unimportant, old investment vehicles of years past. While there are greater than 8000 funds with their doors open today, we at Insider Monkey look at the moguls of this club, around 450 funds. It is widely believed that this group oversees most of the smart money’s total asset base, and by keeping an eye on their top picks, we have uncovered a few investment strategies that have historically outperformed the S&P 500 index. 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 topped the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).

Equally as integral, optimistic insider trading activity is another way to break down the stock market universe. As the old adage goes: there are lots of stimuli for a bullish insider to get rid of shares of his or her company, but just one, very simple reason why they would buy. Many empirical studies have demonstrated the impressive potential of this strategy if investors understand what to do (learn more here).

Now, let’s take a glance at the latest action encompassing BancorpSouth, Inc. (NYSE:BXS).

Hedge fund activity in BancorpSouth, Inc. (NYSE:BXS)

At the end of the fourth quarter, a total of 10 of the hedge funds we track held long positions in this stock, a change of -17% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were upping their stakes considerably.

When looking at the hedgies we track, Dreman Value Management, managed by David Dreman, holds the largest position in BancorpSouth, Inc. (NYSE:BXS). Dreman Value Management has a $26.6 million position in the stock, comprising 0.8% of its 13F portfolio. On Dreman Value Management’s heels is Citadel Investment Group, managed by Ken Griffin, which held a $14.4 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other peers that are bullish include Chuck Royce’s Royce & Associates, Matthew Lindenbaum’s Basswood Capital and Bruce Kovner’s Caxton Associates LP.

Seeing as BancorpSouth, Inc. (NYSE:BXS) has witnessed a declination in interest from the aggregate hedge fund industry, logic holds that there lies a certain “tier” of money managers that slashed their full holdings at the end of the year. Interestingly, John Overdeck and David Siegel’s Two Sigma Advisors said goodbye to the biggest position of the “upper crust” of funds we key on, comprising about $0.2 million in stock.. Mike Vranos’s fund, Ellington, also said goodbye to its stock, about $0.2 million worth. These transactions are interesting, as total hedge fund interest dropped by 2 funds at the end of the year.

What do corporate executives and insiders think about BancorpSouth, Inc. (NYSE:BXS)?

Insider buying is best served when the company in question has seen transactions within the past half-year. Over the latest half-year time frame, BancorpSouth, Inc. (NYSE:BXS) has seen 1 unique insiders buying, and 2 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to BancorpSouth, Inc. (NYSE:BXS). These stocks are EverBank Financial Corp (NYSE:EVER), F.N.B. Corp (NYSE:FNB), Trustmark Corp (NASDAQ:TRMK), IBERIABANK Corporation (NASDAQ:IBKC), and Bank Of The Ozarks Inc (NASDAQ:OZRK). This group of stocks belong to the regional – southeast banks industry and their market caps match BXS’s market cap.

With the results demonstrated by the aforementioned time-tested strategies, everyday investors should always monitor hedge fund and insider trading activity, and BancorpSouth, Inc. (NYSE:BXS) applies perfectly to this mantra.

Click here to learn why you should track hedge funds