Hedge Funds Keep Buying IBERIABANK Corp (IBKC)

It seems that the masses and most of the financial media hate hedge funds and what they do, but why is this hatred of hedge funds so prominent? At the end of the day, these asset management firms do not gamble the hard-earned money of the people who are on the edge of poverty. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. The S&P 500 Index gained 7.6% in the 12 month-period that ended November 21, while less than 49% of its stocks beat the benchmark. In contrast, the 30 most popular mid-cap stocks among the top hedge fund investors tracked by the Insider Monkey team returned 18% over the same period, which provides evidence that these money managers do have great stock picking abilities. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like IBERIABANK Corp (NASDAQ:IBKC) .

Is IBERIABANK Corp (NASDAQ:IBKC) undervalued? The smart money is taking a bullish view. The number of bullish hedge fund investments strengthened by 1 lately. At the end of this article we will also compare IBKC to other stocks including REGAL-BELOIT CORPORATION (NYSE:RBC), Companhia Paranaense de Energia (ADR) (NYSE:ELP), and Kite Pharma Inc (NASDAQ:KITE) to get a better sense of its popularity.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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Hedge fund activity in IBERIABANK Corp (NASDAQ:IBKC)

Heading into the fourth quarter of 2016, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 6% increase from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards IBKC over the last 5 quarters, which has steadily risen. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey’s hedge fund database, Millennium Management, founded by Israel Englander, holds the biggest position in IBERIABANK Corporation (NASDAQ:IBKC). Millennium Management has a $21.1 million position in the stock. The second most bullish fund manager is Ascend Capital, led by Malcolm Fairbairn, holding a $17.2 million position; the fund has 1.1% of its 13F portfolio invested in the stock. Other professional money managers that are bullish comprise Jim Simons’ Renaissance Technologies, Mark Lee’s Forest Hill Capital, and Dmitry Balyasny’s Balyasny Asset Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

With general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Tudor Investment Corp, led by Paul Tudor Jones, assembled the largest position in IBERIABANK Corporation (NASDAQ:IBKC). Tudor Investment Corp had $0.7 million invested in the company at the end of the quarter. Matthew Tewksbury’s Stevens Capital Management also made a $0.4 million investment in the stock during the quarter. The following funds were also among the new IBKC investors: James Dondero’s Highland Capital Management and David Costen Haley’s HBK Investments.

Let’s now take a look at hedge fund activity in other stocks similar to IBERIABANK Corporation (NASDAQ:IBKC). These stocks are REGAL-BELOIT CORPORATION (NYSE:RBC), Companhia Paranaense de Energia (ADR) (NYSE:ELP), Kite Pharma Inc (NASDAQ:KITE), and Cree, Inc. (NASDAQ:CREE). All of these stocks’ market caps resemble IBKC’s market cap.

As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $131 million. That figure was $79 million in IBKC’s case. Kite Pharma Inc (NASDAQ:KITE) is the most popular stock in this table. On the other hand Companhia Paranaense de Energia (ADR) (NYSE:ELP) is the least popular one with only 10 bullish hedge fund positions. IBERIABANK Corporation (NASDAQ:IBKC) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard KITE might be a better candidate to consider taking a long position in.

Disclosure: None