While the market driven by short-term sentiment influenced by uncertainty regarding the future of the interest rate environment in the US, the low commodity prices and the economic turmoil in China, many smart money investors are keeping their optimism regarding the current bull run, while still hedging many of their long positions. However, as we know, big investors usually buy stocks with strong fundamentals, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Hilltop Holdings Inc. (NYSE:HTH).
Hilltop Holdings Inc. (NYSE:HTH) has experienced a decrease in activity from the world’s largest hedge funds lately. Hilltop Holdings Inc. (NYSE:HTH) was in 19 hedge funds’ portfolios at the end of the third quarter of 2015. There were 21 hedge funds in our database with Hilltop Holdings Inc. (NYSE:HTH) holdings at the end of the previous quarter. At the end of this article, we will also compare Hilltop Holdings Inc. (NYSE:HTH) to other stocks, including Barnes Group Inc. (NYSE:B), Globus Medical Inc (NYSE:GMED), and Terex Corporation (NYSE:TEX) to get a better sense of its popularity.
Follow Hilltop Holdings Inc. (NYSE:HTH)
Follow Hilltop Holdings Inc. (NYSE:HTH)
In the financial world, there are tons of tools market participants employ to size up publicly traded companies. A couple of the less utilized tools are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the top picks of the top hedge fund managers can outperform the broader indices by a significant amount (see the details here).
Keeping this in mind, let’s view the recent action regarding Hilltop Holdings Inc. (NYSE:HTH).
What have hedge funds been doing with Hilltop Holdings Inc. (NYSE:HTH)?
At the end of the third quarter, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a drop of 10% from the second quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Nehal Chopra’s Ratan Capital Group has the biggest position in Hilltop Holdings Inc. (NYSE:HTH), worth close to $11.8 million, comprising 2.6% of its total 13F portfolio. The second most bullish fund manager is Bandera Partners, managed by Gregory Bylinsky and Jefferson Gramm, which holds a $11.6 million position; the fund has 6.8% of its 13F portfolio invested in the stock. Remaining members of the smart money that are bullish consist of Mario Gabelli’s GAMCO Investors, William Black’s Consector Capital, and Renaissance Technologies.
Seeing as Hilltop Holdings Inc. (NYSE:HTH) has faced a bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of funds who sold off their entire stakes heading into Q4. It’s worth mentioning that Jeff Lignelli’s Incline Global Management sold off the largest stake of all the hedgies watched by Insider Monkey, totaling an estimated $16.3 million in stock, and Rod Hinze’s KeyPoint Capital Management was right behind this move, as the fund dumped about $1.2 million worth of shares. These moves are important to note, as aggregate hedge fund interest fell by 2 funds heading into Q4.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Hilltop Holdings Inc. (NYSE:HTH) but similarly valued. These stocks are Barnes Group Inc. (NYSE:B), Globus Medical Inc (NYSE:GMED), Terex Corporation (NYSE:TEX), and Knight Transportation (NYSE:KNX). This group of stocks’ market caps is closest to Hilltop Holdings Inc. (NYSE:HTH)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| B | 13 | 57419 | -6 |
| GMED | 23 | 85088 | 3 |
| TEX | 23 | 255876 | -5 |
| KNX | 19 | 81449 | -3 |
As you can see, these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $120 million. That figure was $49 million in Hilltop Holdings Inc. (NYSE:HTH)’s case. Globus Medical Inc (NYSE:GMED) is the most popular stock in this table. On the other hand, Barnes Group Inc. (NYSE:B) is the least popular one with only 13 bullish hedge fund positions. Hilltop Holdings Inc. (NYSE:HTH) 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, Globus Medical Inc (NYSE:GMED) might be a better candidate to consider a long position.
