World-class money managers like Bill Ackman and Barry Rosenstein only invest their wealthy clients’ money after undertaking a rigorous examination of any potential stock. They are particularly successful in this regard when it comes to small-cap stocks, which their peerless research gives them a big information advantage on when it comes to judging their worth. It’s not surprising then that they generate their biggest returns from these stocks and invest more of their money in these stocks on average than other investors. It’s also not surprising then that we pay close attention to these picks ourselves and have built a market-beating investment strategy around them.
Is East West Bancorp, Inc. (NASDAQ:EWBC) a great stock to buy now? Hedge funds are taking an optimistic view. The number of bullish hedge fund positions increased by 2 lately. 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 Realogy Holdings Corp (NYSE:RLGY), Allegion PLC (NYSE:ALLE), and IDEX Corporation (NYSE:IEX) to gather more data points.
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Now, we’re going to check out the key action regarding East West Bancorp, Inc. (NASDAQ:EWBC).
Hedge fund activity in East West Bancorp, Inc. (NASDAQ:EWBC)
At Q3’s end, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of 10% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Ken Fisher’s Fisher Asset Management has the most valuable position in East West Bancorp, Inc. (NASDAQ:EWBC), worth close to $111.9 million, comprising 0.2% of its total 13F portfolio. The second largest stake is held by Millennium Management, led by Israel Englander, holding a $46.4 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining peers with similar optimism include Cliff Asness’ AQR Capital Management, Jim Simons’ Renaissance Technologies and John Overdeck and David Siegel’s Two Sigma Advisors.
With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Renaissance Technologies, managed by Jim Simons, created the biggest position in East West Bancorp, Inc. (NASDAQ:EWBC). Renaissance Technologies had $22.5 million invested in the company at the end of the quarter. Anand Parekh’s Alyeska Investment Group also made a $2.1 million investment in the stock during the quarter. The other funds with new positions in the stock are Ken Gray and Steve Walsh’s Bryn Mawr Capital, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Joseph A. Jolson’s Harvest Capital Strategies.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as East West Bancorp, Inc. (NASDAQ:EWBC) but similarly valued. We will take a look at Realogy Holdings Corp (NYSE:RLGY), Allegion PLC (NYSE:ALLE), IDEX Corporation (NYSE:IEX), and Randgold Resources Ltd. (ADR) (NASDAQ:GOLD). All of these stocks’ market caps are similar to EWBC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RLGY | 48 | 2032810 | 6 |
| ALLE | 30 | 1168992 | -3 |
| IEX | 15 | 196410 | 0 |
| GOLD | 16 | 164516 | 2 |
As you can see these stocks had an average of 27.25 hedge funds with bullish positions and the average amount invested in these stocks was $891 million. That figure was $296 million in EWBC’s case. Realogy Holdings Corp (NYSE:RLGY) is the most popular stock in this table. On the other hand IDEX Corporation (NYSE:IEX) is the least popular one with only 15 bullish hedge fund positions. East West Bancorp, Inc. (NASDAQ:EWBC) 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 RLGY might be a better candidate to consider a long position.
