It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. The Standard and Poor’s 500 Index returned 7.6% over the 12-month period ending November 21, while more than 51% of the constituents of the index underperformed the benchmark. Hence, a random stock picking process will most likely lead to disappointment. At the same time, the 30 most favored mid-cap stocks by the best performing hedge funds monitored by Insider Monkey generated a return of 18% over the same time span. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in Associated Banc Corp (NYSE:ASB).
Associated Banc Corp (NYSE:ASB) investors should be aware of an increase in support from the world’s most successful money managers lately. 12 hedge funds that we track were long the stock on September 30. There were 11 hedge funds in our database with ASB positions on June 30. 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 Valero Energy Partners LP (NYSE:VLP), Exelixis, Inc. (NASDAQ:EXEL), and ALLETE Inc (NYSE:ALE) to gather more data points.
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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 Associated Banc Corp (NYSE:ASB)
At Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 9% gain from the previous quarter. Below, you can check out the change in hedge fund sentiment towards ASB over the last 5 quarters, which has fluctuated within a narrow range of between 11 and 12 bullish hedge fund positions. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Pzena Investment Management, led by Richard S. Pzena, holds the number one position in Associated Banc Corp (NYSE:ASB). Pzena Investment Management has a $47.6 million position in the stock. The second most bullish fund manager is Millennium Management, one of the 10 largest hedge funds in the world, which holds a $27.2 million position. Other members of the smart money that are bullish include Chuck Royce’s Royce & Associates, Cliff Asness’ AQR Capital Management, and Michael Platt and William Reeves’ BlueCrest Capital Mgmt. 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.
As one would reasonably expect, key hedge funds have jumped into Associated Banc Corp (NYSE:ASB) headfirst. Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, assembled the biggest position in Associated Banc Corp (NYSE:ASB). Arrowstreet Capital had $1.6 million invested in the company at the end of the quarter. Solomon Kumin’s Folger Hill Asset Management also made a $1.1 million investment in the stock during the quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Associated Banc Corp (NYSE:ASB). We will take a look at Valero Energy Partners LP (NYSE:VLP), Exelixis, Inc. (NASDAQ:EXEL), ALLETE Inc (NYSE:ALE), and UMB Financial Corporation (NASDAQ:UMBF). This group of stocks’ market values match ASB’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VLP | 3 | 4121 | -2 |
| EXEL | 34 | 505946 | 13 |
| ALE | 11 | 56449 | -5 |
| UMBF | 9 | 64230 | 1 |
As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $158 million. That figure was $122 million in ASB’s case. Exelixis, Inc. (NASDAQ:EXEL) is the most popular stock in this table. On the other hand Valero Energy Partners LP (NYSE:VLP) is the least popular one with only 3 bullish hedge fund positions. Associated Banc Corp (NYSE:ASB) 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 EXEL might be a better candidate to consider taking a long position in.
Disclosure: None
