Hedge Funds Are Selling First Republic Bank (FRC)

Is First Republic Bank (NYSE:FRC) ready to rally soon? Hedge funds are turning less bullish. The number of bullish hedge fund positions were cut by 1 lately.

In today’s marketplace, there are many indicators shareholders can use to watch the equity markets. Two of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top money managers can beat the broader indices by a significant margin (see just how much).

Just as beneficial, bullish insider trading activity is another way to break down the stock market universe. Just as you’d expect, there are lots of incentives for an upper level exec to get rid of shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Plenty of academic studies have demonstrated the market-beating potential of this method if you understand what to do (learn more here).

Keeping this in mind, it’s important to take a gander at the key action surrounding First Republic Bank (NYSE:FRC).

What have hedge funds been doing with First Republic Bank (NYSE:FRC)?

Heading into Q2, a total of 22 of the hedge funds we track were bullish in this stock, a change of -4% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their holdings substantially.

Of the funds we track, Robert Joseph Caruso’s Select Equity Group had the most valuable position in First Republic Bank (NYSE:FRC), worth close to $116.8 million, accounting for 1.6% of its total 13F portfolio. Coming in second is John Armitage of Egerton Capital Limited, with a $43.1 million position; 1.1% of its 13F portfolio is allocated to the stock. Some other hedgies that are bullish include Jim Simons’s Renaissance Technologies, David Stemerman’s Conatus Capital Management and John Osterweis’s Osterweis Capital Management.

Because First Republic Bank (NYSE:FRC) has faced a declination in interest from the smart money, logic holds that there lies a certain “tier” of hedgies that slashed their full holdings in Q1. Interestingly, Mark McGoldrick and Jason Maynard’s Mouth Kellett Capital Management said goodbye to the largest stake of the 450+ funds we track, worth about $13.3 million in stock.. Clint Carlson’s fund, Carlson Capital, also said goodbye to its stock, about $8.4 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 1 funds in Q1.

How are insiders trading First Republic Bank (NYSE:FRC)?

Insider purchases made by high-level executives is particularly usable when the company in question has seen transactions within the past six months. Over the latest half-year time period, First Republic Bank (NYSE:FRC) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to First Republic Bank (NYSE:FRC). These stocks are SunTrust Banks, Inc. (NYSE:STI), Credicorp Ltd. (USA) (NYSE:BAP), TCF Financial Corporation (NYSE:TCB), and KeyCorp (NYSE:KEY). This group of stocks belong to the money center banks industry and their market caps are closest to FRC’s market cap.