Here is What Hedge Funds Think About Valley National Bancorp (VLY)

Valley National Bancorp (NYSE:VLY) was in 10 hedge funds’ portfolio at the end of December. VLY investors should be aware of an increase in hedge fund sentiment in recent months. There were 9 hedge funds in our database with VLY positions at the end of the previous quarter.

According to most traders, hedge funds are assumed to be underperforming, old financial vehicles of years past. While there are greater than 8000 funds with their doors open at present, we at Insider Monkey look at the bigwigs of this club, close to 450 funds. Most estimates calculate that this group oversees the majority of the hedge fund industry’s total capital, and by tracking their highest performing picks, we have uncovered a few investment strategies that have historically beaten the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum 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 trumped the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).

Just as integral, optimistic insider trading sentiment is a second way to break down the marketplace. There are a variety of incentives for an insider to sell shares of his or her company, but only one, very clear reason why they would buy. Several academic studies have demonstrated the useful potential of this tactic if you know what to do (learn more here).

Now, let’s take a look at the recent action encompassing Valley National Bancorp (NYSE:VLY).

What have hedge funds been doing with Valley National Bancorp (NYSE:VLY)?

In preparation for this year, a total of 10 of the hedge funds we track were long in this stock, a change of 11% from the previous quarter. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were increasing their stakes meaningfully.

When looking at the hedgies we track, Renaissance Technologies, managed by Jim Simons, holds the most valuable position in Valley National Bancorp (NYSE:VLY). Renaissance Technologies has a $9.7 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Renaissance Technologies’s heels is Royce & Associates, managed by Chuck Royce, which held a $5.6 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include Ken Griffin’s Citadel Investment Group, Jane Mendillo’s Harvard Management Co and Matthew Lindenbaum’s Basswood Capital.

As industrywide interest jumped, key money managers were leading the bulls’ herd. SAC Capital Advisors, managed by Steven Cohen, assembled the biggest position in Valley National Bancorp (NYSE:VLY). SAC Capital Advisors had 0.2 million invested in the company at the end of the quarter.

What have insiders been doing with Valley National Bancorp (NYSE:VLY)?

Insider trading activity, especially when it’s bullish, is particularly usable when the company we’re looking at has experienced transactions within the past half-year. Over the latest 180-day time period, Valley National Bancorp (NYSE:VLY) has experienced 11 unique insiders purchasing, and 2 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Valley National Bancorp (NYSE:VLY). These stocks are Community Bank System, Inc. (NYSE:CBU), National Penn Bancshares (NASDAQ:NPBC), Fulton Financial Corp (NASDAQ:FULT), Susquehanna Bancshares Inc (NASDAQ:SUSQ), and Webster Financial Corporation (NYSE:WBS). This group of stocks are in the regional – northeast banks industry and their market caps resemble VLY’s market cap.