Is Columbia Banking System Inc (NASDAQ:COLB) a good investment now? Hedge funds are becoming less confident. The number of long hedge fund positions dropped by 2 lately.
At the moment, there are plenty of methods investors can use to monitor the equity markets. A duo of the most underrated are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best fund managers can outclass the S&P 500 by a healthy amount (see just how much).
Just as key, positive insider trading activity is another way to parse down the stock market universe. Obviously, there are lots of stimuli for a bullish insider to sell shares of his or her company, but just one, very obvious reason why they would buy. Several academic studies have demonstrated the valuable potential of this strategy if shareholders understand what to do (learn more here).
With all of this in mind, let’s take a gander at the recent action surrounding Columbia Banking System Inc (NASDAQ:COLB).
What does the smart money think about Columbia Banking System Inc (NASDAQ:COLB)?
Heading into 2013, a total of 7 of the hedge funds we track were bullish in this stock, a change of -22% from one quarter earlier. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings substantially.
Of the funds we track, Chuck Royce’s Royce & Associates had the most valuable position in Columbia Banking System Inc (NASDAQ:COLB), worth close to $13.9 million, accounting for less than 0.1%% of its total 13F portfolio. The second largest stake is held by AQR Capital Management, managed by Cliff Asness, which held a $8.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other peers that hold long positions include John Overdeck and David Siegel’s Two Sigma Advisors, Jim Simons’s Renaissance Technologies and Israel Englander’s Millennium Management.
Seeing as Columbia Banking System Inc (NASDAQ:COLB) has experienced bearish sentiment from hedge fund managers, we can see that there was a specific group of funds that elected to cut their full holdings heading into 2013. At the top of the heap, Mike Vranos’s Ellington cut the largest stake of the “upper crust” of funds we track, worth about $0.7 million in stock., and Steven Cohen of SAC Capital Advisors was right behind this move, as the fund said goodbye to about $0.4 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 2 funds heading into 2013.
What do corporate executives and insiders think about Columbia Banking System Inc (NASDAQ:COLB)?
Insider buying is particularly usable when the primary stock in question has experienced transactions within the past six months. Over the last half-year time frame, Columbia Banking System Inc (NASDAQ:COLB) has experienced 2 unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Columbia Banking System Inc (NASDAQ:COLB). These stocks are Berkshire Hills Bancorp, Inc. (NYSE:BHLB), Kearny Financial Corp. (NASDAQ:KRNY), Flagstar Bancorp Inc (NYSE:FBC), Astoria Financial Corp (NYSE:AF), and Provident Financial Services, Inc. (NYSE:PFS). This group of stocks are in the savings & loans industry and their market caps are similar to COLB’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Berkshire Hills Bancorp, Inc. (NYSE:BHLB) | 6 | 1 | 2 |
| Kearny Financial Corp. (NASDAQ:KRNY) | 5 | 1 | 3 |
| Flagstar Bancorp Inc (NYSE:FBC) | 14 | 1 | 0 |
| Astoria Financial Corp (NYSE:AF) | 14 | 1 | 3 |
| Provident Financial Services, Inc. (NYSE:PFS) | 6 | 3 | 1 |
With the returns demonstrated by Insider Monkey’s time-tested strategies, everyday investors should always monitor hedge fund and insider trading activity, and Columbia Banking System Inc (NASDAQ:COLB) shareholders fit into this picture quite nicely.
