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

SunTrust Banks, Inc. (NYSE:STI) shareholders have witnessed a decrease in activity from the world’s largest hedge funds of late.

To the average investor, there are plenty of gauges market participants can use to analyze stocks. Some of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top money managers can outperform the broader indices by a solid margin (see just how much).

Equally as key, positive insider trading sentiment is another way to break down the stock market universe. Obviously, there are lots of incentives for an upper level exec to get rid of shares of his or her company, but just one, very clear reason why they would behave bullishly. Several academic studies have demonstrated the impressive potential of this method if “monkeys” understand where to look (learn more here).

With these “truths” under our belt, it’s important to take a glance at the recent action regarding SunTrust Banks, Inc. (NYSE:STI).

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

At the end of the first quarter, a total of 31 of the hedge funds we track were long in this stock, a change of -21% from the first quarter. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were upping their holdings significantly.

According to our comprehensive database, Ken Griffin’s Citadel Investment Group had the largest position in SunTrust Banks, Inc. (NYSE:STI), worth close to $128.8 million, comprising 0.2% of its total 13F portfolio. Sitting at the No. 2 spot is Crispin Odey of Odey Asset Management Group, with a $49.7 million position; the fund has 1.7% of its 13F portfolio invested in the stock. Some other hedgies that hold long positions include Richard Chilton’s Chilton Investment Company, Matthew Tewksbury’s Stevens Capital Management and Matthew Lindenbaum’s Basswood Capital.

Seeing as SunTrust Banks, Inc. (NYSE:STI) has witnessed falling interest from the entirety of the hedge funds we track, it’s easy to see that there was a specific group of hedgies that elected to cut their positions entirely at the end of the first quarter. Interestingly, George Soros’s Soros Fund Management cut the largest stake of the “upper crust” of funds we key on, totaling about $43 million in stock.. Stanley Druckenmiller’s fund, Duquesne Capital, also sold off its stock, about $25.9 million worth. These transactions are intriguing to say the least, as total hedge fund interest was cut by 8 funds at the end of the first quarter.

What have insiders been doing with SunTrust Banks, Inc. (NYSE:STI)?

Insider buying is most useful when the company in focus has seen transactions within the past 180 days. Over the latest six-month time frame, SunTrust Banks, Inc. (NYSE:STI) has seen zero unique insiders purchasing, and 6 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to SunTrust Banks, Inc. (NYSE:STI). These stocks are PNC Financial Services (NYSE:PNC), Canadian Imperial Bank of Commerce (USA) (NYSE:CM), KeyCorp (NYSE:KEY), Credicorp Ltd. (USA) (NYSE:BAP), and Banco Santander-Chile (ADR) (NYSE:BSAC). This group of stocks are in the money center banks industry and their market caps are closest to STI’s market cap.

With the returns demonstrated by the aforementioned time-tested strategies, retail investors should always monitor hedge fund and insider trading activity, and SunTrust Banks, Inc. (NYSE:STI) applies perfectly to this mantra.

Click here to learn why you should track hedge funds