How do we determine whether Investors Bancorp, Inc. (NASDAQ:ISBC) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
Investors Bancorp, Inc. (NASDAQ:ISBC) investors should be aware of a decrease in activity from the world’s largest hedge funds lately. ISBC was in 27 hedge funds’ portfolios at the end of the fourth quarter of 2018. There were 33 hedge funds in our database with ISBC positions at the end of the previous quarter. Our calculations also showed that isbc isn’t among the 30 most popular stocks among hedge funds.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
We’re going to go over the latest hedge fund action surrounding Investors Bancorp, Inc. (NASDAQ:ISBC).
What have hedge funds been doing with Investors Bancorp, Inc. (NASDAQ:ISBC)?
Heading into the first quarter of 2019, a total of 27 of the hedge funds tracked by Insider Monkey were long this stock, a change of -18% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards ISBC over the last 14 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Clifton S. Robbins’s Blue Harbour Group has the number one position in Investors Bancorp, Inc. (NASDAQ:ISBC), worth close to $296 million, corresponding to 15.8% of its total 13F portfolio. On Blue Harbour Group’s heels is Scopia Capital, led by Matt Sirovich and Jeremy Mindich, holding a $112.7 million position; the fund has 3.8% of its 13F portfolio invested in the stock. Remaining professional money managers that are bullish comprise Dmitry Balyasny’s Balyasny Asset Management, Ken Griffin’s Citadel Investment Group and Jim Simons’s Renaissance Technologies.
Since Investors Bancorp, Inc. (NASDAQ:ISBC) has faced a decline in interest from the aggregate hedge fund industry, it’s safe to say that there exists a select few hedge funds that elected to cut their entire stakes last quarter. At the top of the heap, Isaac Corre’s Governors Lane dumped the biggest stake of the 700 funds tracked by Insider Monkey, totaling close to $25.8 million in stock. Anton Schutz’s fund, Mendon Capital Advisors, also dumped its stock, about $20.3 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 6 funds last quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Investors Bancorp, Inc. (NASDAQ:ISBC) but similarly valued. We will take a look at BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ), Belmond Ltd (NYSE:BEL), Versum Materials, Inc. (NYSE:VSM), and Spirit Realty Capital Inc (NYSE:SRC). This group of stocks’ market values match ISBC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BJ | 16 | 233292 | -16 |
| BEL | 20 | 334659 | 4 |
| VSM | 29 | 491674 | 8 |
| SRC | 19 | 252031 | -2 |
| Average | 21 | 327914 | -1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $328 million. That figure was $651 million in ISBC’s case. Versum Materials, Inc. (NYSE:VSM) is the most popular stock in this table. On the other hand BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) is the least popular one with only 16 bullish hedge fund positions. Investors Bancorp, Inc. (NASDAQ:ISBC) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Hedge funds were also right about betting on ISBC, though not to the same extent, as the stock returned 16.7% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
