Is First California Financial Group, Inc. (NASDAQ:FCAL) a bargain? The smart money is turning bullish. The number of bullish hedge fund positions moved up by 1 in recent months.
To most traders, hedge funds are perceived as worthless, old financial vehicles of the past. While there are over 8000 funds trading at present, we hone in on the bigwigs of this group, about 450 funds. It is widely believed that this group oversees the lion’s share of all hedge funds’ total asset base, and by tracking their best stock picks, we have come up with a few investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Equally as key, bullish insider trading activity is another way to parse down the stock market universe. Just as you’d expect, there are many reasons for an executive to sell shares of his or her company, but just one, very simple reason why they would buy. Various empirical studies have demonstrated the market-beating potential of this tactic if “monkeys” understand what to do (learn more here).
Consequently, it’s important to take a gander at the key action surrounding First California Financial Group, Inc. (NASDAQ:FCAL).
How are hedge funds trading First California Financial Group, Inc. (NASDAQ:FCAL)?
In preparation for this year, a total of 11 of the hedge funds we track were long in this stock, a change of 10% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings substantially.
Of the funds we track, Cliff Asness’s AQR Capital Management had the most valuable position in First California Financial Group, Inc. (NASDAQ:FCAL), worth close to $16.7 million, accounting for 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Hudson Bay Capital Management, managed by Sander Gerber, which held a $8.2 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Matthew Lindenbaum’s Basswood Capital, Jane Mendillo’s Harvard Management Co and Robert Emil Zoellner’s Alpine Associates.
As industrywide interest jumped, key money managers have been driving this bullishness. Harvard Management Co, managed by Jane Mendillo, assembled the most valuable position in First California Financial Group, Inc. (NASDAQ:FCAL). Harvard Management Co had 4.6 million invested in the company at the end of the quarter. Robert Emil Zoellner’s Alpine Associates also initiated a $4.6 million position during the quarter.
What have insiders been doing with First California Financial Group, Inc. (NASDAQ:FCAL)?
Insider buying is at its handiest when the company we’re looking at has seen transactions within the past 180 days. Over the latest six-month time period, First California Financial Group, Inc. (NASDAQ:FCAL) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to First California Financial Group, Inc. (NASDAQ:FCAL). These stocks are Bank of Marin Bancorp (NASDAQ:BMRC), Heritage Financial Corporation (NASDAQ:HFWA), TriCo Bancshares (NASDAQ:TCBK), Bridge Capital Holdings (NASDAQ:BBNK), and Territorial Bancorp Inc (NASDAQ:TBNK). This group of stocks are in the regional – pacific banks industry and their market caps are closest to FCAL’s market cap.