Hedge Funds Are Dumping TCF Financial Corporation (TCB)

TCF Financial Corporation (NYSE:TCB) shareholders have witnessed a decrease in support from the world’s most elite money managers in recent months.

In the 21st century investor’s toolkit, there are a multitude of methods investors can use to monitor the equity markets. A pair of the most under-the-radar are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite investment managers can outperform the S&P 500 by a significant margin (see just how much).

Just as integral, optimistic insider trading sentiment is a second way to break down the world of equities. There are plenty of incentives for an insider to drop shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Several academic studies have demonstrated the impressive potential of this method if shareholders know where to look (learn more here).

Consequently, let’s take a peek at the latest action encompassing TCF Financial Corporation (NYSE:TCB).

What does the smart money think about TCF Financial Corporation (NYSE:TCB)?

In preparation for this year, a total of 10 of the hedge funds we track were bullish in this stock, a change of -9% from the previous quarter. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were upping their stakes substantially.

According to our comprehensive database, Pzena Investment Management, managed by Richard S. Pzena, holds the most valuable position in TCF Financial Corporation (NYSE:TCB). Pzena Investment Management has a $27.7 million position in the stock, comprising 0.2% of its 13F portfolio. Sitting at the No. 2 spot is David Dreman of Dreman Value Management, with a $19.3 million position; 0.6% of its 13F portfolio is allocated to the company. Other hedgies that hold long positions include Anil Stevens and Glenn Shapiro’s Parameter Capital Management, Philippe Jabre’s Jabre Capital Partners and Matthew Lindenbaum’s Basswood Capital.

Judging by the fact that TCF Financial Corporation (NYSE:TCB) has experienced declining sentiment from hedge fund managers, logic holds that there lies a certain “tier” of money managers who were dropping their full holdings last quarter. Interestingly, Richard Schimel’s Diamondback Capital sold off the biggest stake of all the hedgies we track, valued at an estimated $7.5 million in stock., and J. Alan Reid, Jr. of Forward Management was right behind this move, as the fund dumped about $0.3 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 1 funds last quarter.

How have insiders been trading TCF Financial Corporation (NYSE:TCB)?

Insider purchases made by high-level executives is at its handiest when the company we’re looking at has seen transactions within the past 180 days. Over the last 180-day time frame, TCF Financial Corporation (NYSE:TCB) has experienced 3 unique insiders buying, 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 TCF Financial Corporation (NYSE:TCB). These stocks are KeyCorp (NYSE:KEY), Oriental Financial Group Inc. (NYSE:OFG), Home Bancshares Inc (NASDAQ:HOMB), National Bank of Greece (ADR) (NYSE:NBG), and First Republic Bank (NYSE:FRC). This group of stocks belong to the money center banks industry and their market caps match TCB’s market cap.

With the returns demonstrated by the aforementioned strategies, retail investors must always watch hedge fund and insider trading activity, and TCF Financial Corporation (NYSE:TCB) is an important part of this process.

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