Hedge Funds Are Selling TCF Financial Corporation (TCB)

Is TCF Financial Corporation (NYSE:TCB) a worthy investment right now? Investors who are in the know are becoming less hopeful. The number of long hedge fund bets were cut by 2 recently.

In the financial world, there are plenty of methods market participants can use to watch Mr. Market. 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 fund managers can outclass the market by a very impressive margin (see just how much).

Equally as key, bullish insider trading sentiment is a second way to break down the investments you’re interested in. There are a variety of reasons for an upper level exec to sell shares of his or her company, but just one, very obvious reason why they would buy. Many academic studies have demonstrated the valuable potential of this strategy if shareholders understand where to look (learn more here).

Now, we’re going to take a glance at the latest action encompassing TCF Financial Corporation (NYSE:TCB).

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

At Q1’s end, a total of 8 of the hedge funds we track were long in this stock, a change of -20% from the previous quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes meaningfully.

Of the funds we track, Richard S. Pzena’s Pzena Investment Management had the largest position in TCF Financial Corporation (NYSE:TCB), worth close to $34.1 million, comprising 0.2% of its total 13F portfolio. On Pzena Investment Management’s heels is Dreman Value Management, managed by David Dreman, which held a $23.5 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Other hedgies that are bullish include Philippe Jabre’s Jabre Capital Partners, Phill Gross and Robert Atchinson’s Adage Capital Management and J. Alan Reid, Jr.’s Forward Management.

Because TCF Financial Corporation (NYSE:TCB) has experienced bearish sentiment from the smart money, we can see that there is a sect of funds that slashed their entire stakes heading into Q2. It’s worth mentioning that Anil Stevens and Glenn Shapiro’s Parameter Capital Management dropped the largest position of all the hedgies we monitor, totaling about $3.3 million in stock., and Matthew Lindenbaum of Basswood Capital was right behind this move, as the fund dumped about $2.1 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 2 funds heading into Q2.

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

Insider purchases made by high-level executives is best served when the primary stock in question has seen transactions within the past 180 days. Over the latest six-month time frame, TCF Financial Corporation (NYSE:TCB) has experienced 3 unique insiders purchasing, and 3 insider sales (see the details of insider trades here).

Let’s check out 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), and First Republic Bank (NYSE:FRC). This group of stocks are in the money center banks industry and their market caps match TCB’s market cap.