Hedge Funds Are Selling SunTrust Banks, Inc. (NYSE:STI)

SunTrust Banks, Inc. (NYSE:STI) was in 37 hedge funds’ portfolio at the end of the fourth quarter of 2012. STI has seen a decrease in hedge fund interest of late. There were 42 hedge funds in our database with STI positions at the end of the previous quarter.

At the moment, there are plenty of gauges shareholders can use to track stocks. Some of the most innovative are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite fund managers can trounce their index-focused peers by a significant margin (see just how much).

Just as important, positive insider trading sentiment is a second way to parse down the marketplace. Obviously, there are many reasons for an insider to drop shares of his or her company, but only one, very simple reason why they would buy. Plenty of academic studies have demonstrated the impressive potential of this strategy if investors understand where to look (learn more here).

Keeping this in mind, we’re going to take a peek at the latest action regarding SunTrust Banks, Inc. (NYSE:STI).

How are hedge funds trading SunTrust Banks, Inc. (NYSE:STI)?

At year’s end, a total of 37 of the hedge funds we track were bullish in this stock, a change of -12% from the previous quarter. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their stakes substantially.

Of the funds we track, Crispin Odey’s Odey Asset Management Group had the largest position in SunTrust Banks, Inc. (NYSE:STI), worth close to $51 million, accounting for 3% of its total 13F portfolio. On Odey Asset Management Group’s heels is George Soros of Soros Fund Management, with a $43 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Other hedgies with similar optimism include Ken Griffin’s Citadel Investment Group, Stanley Druckenmiller’s Duquesne Capital and Xerion.

Due to the fact that SunTrust Banks, Inc. (NYSE:STI) has faced falling interest from the smart money, we can see that there was a specific group of money managers that elected to cut their positions entirely heading into 2013. It’s worth mentioning that Phill Gross and Robert Atchinson’s Adage Capital Management dumped the largest stake of the “upper crust” of funds we monitor, comprising close to $42 million in stock.. Paul Ruddockáand Steve Heinz’s fund, Lansdowne Partners, also said goodbye to its stock, about $34 million worth. These transactions are important to note, as aggregate hedge fund interest fell by 5 funds heading into 2013.

How have insiders been trading SunTrust Banks, Inc. (NYSE:STI)?

Insider trading activity, especially when it’s bullish, is at its handiest when the company in focus has seen transactions within the past six months. Over the last 180-day time period, SunTrust Banks, Inc. (NYSE:STI) has experienced zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).

With the results demonstrated by the aforementioned studies, retail investors should always pay attention to hedge fund and insider trading activity, and SunTrust Banks, Inc. (NYSE:STI) is no exception.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.