The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their December 31 holdings, data that is available nowhere else. Should you consider Western Alliance Bancorporation (NYSE:WAL) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Western Alliance Bancorporation (NYSE:WAL) has experienced an increase in enthusiasm from smart money of late. Our calculations also showed that WAL 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.
We’re going to take a peek at the latest hedge fund action encompassing Western Alliance Bancorporation (NYSE:WAL).
How are hedge funds trading Western Alliance Bancorporation (NYSE:WAL)?
At the end of the fourth quarter, a total of 28 of the hedge funds tracked by Insider Monkey were long this stock, a change of 22% from the previous quarter. By comparison, 22 hedge funds held shares or bullish call options in WAL a year ago. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
Among these funds, Citadel Investment Group held the most valuable stake in Western Alliance Bancorporation (NYSE:WAL), which was worth $102 million at the end of the third quarter. On the second spot was Millennium Management which amassed $58.4 million worth of shares. Moreover, Marshall Wace LLP, Two Sigma Advisors, and Arrowstreet Capital were also bullish on Western Alliance Bancorporation (NYSE:WAL), allocating a large percentage of their portfolios to this stock.
As aggregate interest increased, some big names were breaking ground themselves. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, initiated the most outsized position in Western Alliance Bancorporation (NYSE:WAL). Marshall Wace LLP had $29.2 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also initiated a $17.7 million position during the quarter. The other funds with brand new WAL positions are Jim Simons’s Renaissance Technologies, James Dondero’s Highland Capital Management, and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.
Let’s check out hedge fund activity in other stocks similar to Western Alliance Bancorporation (NYSE:WAL). We will take a look at Bemis Company, Inc. (NYSE:BMS), LogMeIn Inc (NASDAQ:LOGM), MAXIMUS, Inc. (NYSE:MMS), and AECOM (NYSE:ACM). This group of stocks’ market values are similar to WAL’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BMS | 26 | 304544 | 0 |
| LOGM | 28 | 560052 | -1 |
| MMS | 22 | 302543 | 2 |
| ACM | 18 | 321816 | 0 |
| Average | 23.5 | 372239 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.5 hedge funds with bullish positions and the average amount invested in these stocks was $372 million. That figure was $354 million in WAL’s case. LogMeIn Inc (NASDAQ:LOGM) is the most popular stock in this table. On the other hand AECOM (NYSE:ACM) is the least popular one with only 18 bullish hedge fund positions. Western Alliance Bancorporation (NYSE:WAL) 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 WAL wasn’t nearly as popular as these 15 stock and hedge funds that were betting on WAL were disappointed as the stock returned 9.8% 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.
