Here is What Hedge Funds Think About First Interstate Bancsystem Inc (FIBK)

You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.

In this article, we are going to take a close look at the latest hedge fund activity surrounding First Interstate Bancsystem Inc (NASDAQ:FIBK). Among the funds tracked by Insider Monkey, the company registered an increase in popularity and saw seven funds long its stock at the end of September. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Restoration Hardware Holdings Inc (NYSE:RH), The Navigators Group, Inc (NASDAQ:NAVG), and Provident Financial Services, Inc. (NYSE:PFS) to gather more data points.

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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With all of this in mind, we’re going to analyze the recent action regarding First Interstate Bancsystem Inc (NASDAQ:FIBK).

What have hedge funds been doing with First Interstate Bancsystem Inc (NASDAQ:FIBK)?

Heading into the fourth quarter of 2016, a total of seven of the hedge funds tracked by Insider Monkey were bullish on this stock, compared to five funds a quarter earlier. The graph below displays the number of hedge funds with bullish position in FIBK over the last five quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies which is one of the largest hedge funds in the world, has the biggest position in First Interstate Bancsystem Inc (NASDAQ:FIBK), worth close to $15.2 million. The second most bullish fund manager is Cliff Asness’ AQR Capital Management holding a $12.8 million position. Other members of the smart money with similar optimism contain John Overdeck and David Siegel’s Two Sigma Advisors, D. E. Shaw’s D E Shaw and George Hall’s Clinton Group. 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.

Now, specific money managers have been driving this bullishness. Citadel Investment Group, led by Ken Griffin, established the largest position in First Interstate Bancsystem Inc (NASDAQ:FIBK). Citadel Investment Group had $0.3 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $0.2 million investment in the stock during the quarter.

Let’s now review hedge fund activity in other stocks similar to First Interstate Bancsystem Inc (NASDAQ:FIBK). These stocks are Restoration Hardware Holdings Inc (NYSE:RH), The Navigators Group, Inc (NASDAQ:NAVG), Provident Financial Services, Inc. (NYSE:PFS), and Orbotech Ltd. (NASDAQ:ORBK). This group of stocks’ market valuations resemble FIBK’s market valuation.

As you can see these stocks had an average of 17 funds with bullish positions and the average amount invested in these stocks was $177 million. That figure was $31 million in FIBK’s case. Restoration Hardware Holdings Inc (NYSE:RH) is the most popular stock in this table. On the other hand Provident Financial Services, Inc. (NYSE:PFS) is the least popular one with only five bullish hedge fund positions. First Interstate Bancsystem Inc (NASDAQ:FIBK) 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 RH might be a better candidate to consider taking a long position in.

Disclosure: None