Is Banner Corporation (BANR) Going to Burn These Hedge Funds? – Kearny Financial Corp. (KRNY), Flushing Financial Corporation (FFIC)

Banner Corporation (NASDAQ:BANR) was in 12 hedge funds’ portfolio at the end of the fourth quarter of 2012. BANR investors should be aware of an increase in enthusiasm from smart money of late. There were 10 hedge funds in our database with BANR positions at the end of the previous quarter.

In the 21st century investor’s toolkit, there are tons of gauges shareholders can use to analyze their holdings. Two of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top fund managers can outperform their index-focused peers by a very impressive margin (see just how much).

Just as important, optimistic insider trading activity is another way to parse down the marketplace. There are a number of incentives for an insider to cut shares of his or her company, but just one, very simple reason why they would behave bullishly. Several academic studies have demonstrated the useful potential of this strategy if investors understand where to look (learn more here).

With these “truths” under our belt, it’s important to take a peek at the latest action surrounding Banner Corporation (NASDAQ:BANR).

What have hedge funds been doing with Banner Corporation (NASDAQ:BANR)?

In preparation for this year, a total of 12 of the hedge funds we track held long positions in this stock, a change of 20% from the previous quarter. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were boosting their holdings meaningfully.

When looking at the hedgies we track, Tom Brown’s Second Curve Capital had the most valuable position in Banner Corporation (NASDAQ:BANR), worth close to $22.5 million, accounting for 6.1% of its total 13F portfolio. Coming in second is Matthew Lindenbaum of Basswood Capital, with a $4.2 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Richard Driehaus’s Driehaus Capital, D. E. Shaw’s D E Shaw and Cliff Asness’s AQR Capital Management.

Now, key hedge funds have been driving this bullishness. McKinley Capital Management, managed by Robert B. Gillam, initiated the most valuable position in Banner Corporation (NASDAQ:BANR). McKinley Capital Management had 1.3 million invested in the company at the end of the quarter. Steven Cohen’s SAC Capital Advisors also made a $0.4 million investment in the stock during the quarter. The only other fund with a new position in the stock is Mike Vranos’s Ellington.

Insider trading activity in Banner Corporation (NASDAQ:BANR)

Insider buying is most useful when the company we’re looking at has experienced transactions within the past 180 days. Over the latest 180-day time period, Banner Corporation (NASDAQ:BANR) has experienced zero unique insiders buying, and 1 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Banner Corporation (NASDAQ:BANR). These stocks are Dime Community Bancshares, Inc. (NASDAQ:DCOM), Flushing Financial Corporation (NASDAQ:FFIC), Kearny Financial Corp. (NASDAQ:KRNY), Berkshire Hills Bancorp, Inc. (NYSE:BHLB), and Brookline Bancorp, Inc. (NASDAQ:BRKL). This group of stocks are in the savings & loans industry and their market caps are similar to BANR’s market cap.