Hedge funds are not perfect. They have their bad picks just like everyone else. Facebook, a stock hedge funds have loved, lost a third of its value since the end of July. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 30 S&P 500 stocks among hedge funds at the end of September 2018 yielded an average return of 6.7% year-to-date, vs. a gain of 2.6% for the S&P 500 Index. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of Investors Bancorp, Inc. (NASDAQ:ISBC).
Investors Bancorp, Inc. (NASDAQ:ISBC) has experienced an increase in hedge fund sentiment of late. Our calculations also showed that isbc 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 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 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 gander at the latest hedge fund action surrounding Investors Bancorp, Inc. (NASDAQ:ISBC).
What does the smart money think about Investors Bancorp, Inc. (NASDAQ:ISBC)?
At the end of the third quarter, a total of 33 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 22% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in ISBC over the last 13 quarters. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
The largest stake in Investors Bancorp, Inc. (NASDAQ:ISBC) was held by Blue Harbour Group, which reported holding $354.7 million worth of stock at the end of September. It was followed by Scopia Capital with a $174.1 million position. Other investors bullish on the company included Empyrean Capital Partners, Governors Lane, and Marshall Wace LLP.
As aggregate interest increased, some big names have jumped into Investors Bancorp, Inc. (NASDAQ:ISBC) headfirst. Governors Lane, managed by Isaac Corre, established the most outsized position in Investors Bancorp, Inc. (NASDAQ:ISBC). Governors Lane had $25.8 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also made a $22.6 million investment in the stock during the quarter. The following funds were also among the new ISBC investors: Dmitry Balyasny’s Balyasny Asset Management, Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC, and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Investors Bancorp, Inc. (NASDAQ:ISBC) but similarly valued. These stocks are NuVasive, Inc. (NASDAQ:NUVA), Stifel Financial Corp. (NYSE:SF), Taubman Centers, Inc. (NYSE:TCO), and Barnes Group Inc. (NYSE:B). All of these stocks’ market caps match ISBC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NUVA | 22 | 349724 | -1 |
| SF | 12 | 249082 | -3 |
| TCO | 20 | 252563 | -1 |
| B | 13 | 39069 | 1 |
| Average | 16.75 | 222610 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.75 hedge funds with bullish positions and the average amount invested in these stocks was $223 million. That figure was $777 million in ISBC’s case. NuVasive, Inc. (NASDAQ:NUVA) is the most popular stock in this table. On the other hand Stifel Financial Corp. (NYSE:SF) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Investors Bancorp, Inc. (NASDAQ:ISBC) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None. This article was originally published at Insider Monkey.
