Does First Commonwealth Financial Corporation (NYSE:FCF) represent a good buying opportunity at the moment? Let’s briefly check the hedge fund interest towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on satellite photos and other research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail inconceivably on some occasions, but net net their stock picks have been generating superior risk-adjusted returns on average over the years.
First Commonwealth Financial Corporation (NYSE:FCF) was in 13 hedge funds’ portfolios at the end of the fourth quarter of 2018. FCF has seen an increase in hedge fund sentiment recently. There were 11 hedge funds in our database with FCF positions at the end of the previous quarter. Our calculations also showed that FCF isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Let’s take a glance at the key hedge fund action surrounding First Commonwealth Financial Corporation (NYSE:FCF).
What does the smart money think about First Commonwealth Financial Corporation (NYSE:FCF)?
At Q4’s end, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 18% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards FCF over the last 14 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in First Commonwealth Financial Corporation (NYSE:FCF) was held by Renaissance Technologies, which reported holding $20.9 million worth of stock at the end of December. It was followed by Winton Capital Management with a $9.3 million position. Other investors bullish on the company included Citadel Investment Group, Millennium Management, and PDT Partners.
As aggregate interest increased, specific money managers were breaking ground themselves. D E Shaw, managed by D. E. Shaw, assembled the biggest position in First Commonwealth Financial Corporation (NYSE:FCF). D E Shaw had $0.2 million invested in the company at the end of the quarter. Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital also initiated a $0 million position during the quarter.
Let’s go over hedge fund activity in other stocks similar to First Commonwealth Financial Corporation (NYSE:FCF). These stocks are LexinFintech Holdings Ltd. (NASDAQ:LX), Cango Inc. (NYSE:CANG), Federal Signal Corporation (NYSE:FSS), and Cardtronics plc (NASDAQ:CATM). This group of stocks’ market caps are similar to FCF’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LX | 4 | 3570 | -4 |
| CANG | 2 | 814 | 0 |
| FSS | 22 | 70746 | 4 |
| CATM | 18 | 291296 | 0 |
| Average | 11.5 | 91607 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.5 hedge funds with bullish positions and the average amount invested in these stocks was $92 million. That figure was $40 million in FCF’s case. Federal Signal Corporation (NYSE:FSS) is the most popular stock in this table. On the other hand Cango Inc. (NYSE:CANG) is the least popular one with only 2 bullish hedge fund positions. First Commonwealth Financial Corporation (NYSE:FCF) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately FCF wasn’t nearly as popular as these 15 stock and hedge funds that were betting on FCF were disappointed as the stock returned 10.7% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
