Is SIVB Stock A Buy or Sell?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 887 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of December 31st, 2020. What do these smart investors think about SVB Financial Group (NASDAQ:SIVB)?

Is SIVB stock a buy? Hedge funds were taking an optimistic view. The number of bullish hedge fund bets inched up by 4 recently. SVB Financial Group (NASDAQ:SIVB) was in 31 hedge funds’ portfolios at the end of December. The all time high for this statistic is 42. Our calculations also showed that SIVB isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 124 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Ric Dillon of Diamond Hill Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we heard that billionaire Peter Thiel is backing this biotech stock. So, we are taking a closer look at this space. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Keeping this in mind we’re going to analyze the key hedge fund action encompassing SVB Financial Group (NASDAQ:SIVB).

Do Hedge Funds Think SIVB Is A Good Stock To Buy Now?

At the end of December, a total of 31 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 15% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards SIVB over the last 22 quarters. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

The largest stake in SVB Financial Group (NASDAQ:SIVB) was held by Fisher Asset Management, which reported holding $273.3 million worth of stock at the end of December. It was followed by Diamond Hill Capital with a $120.2 million position. Other investors bullish on the company included AQR Capital Management, Columbus Circle Investors, and Holocene Advisors. In terms of the portfolio weights assigned to each position MD Sass allocated the biggest weight to SVB Financial Group (NASDAQ:SIVB), around 4.19% of its 13F portfolio. Columbus Circle Investors is also relatively very bullish on the stock, designating 2.87 percent of its 13F equity portfolio to SIVB.

As industrywide interest jumped, key hedge funds were breaking ground themselves. Holocene Advisors, managed by Brandon Haley, established the most valuable position in SVB Financial Group (NASDAQ:SIVB). Holocene Advisors had $30.8 million invested in the company at the end of the quarter. Renaissance Technologies also initiated a $22.1 million position during the quarter. The following funds were also among the new SIVB investors: Joel Greenblatt’s Gotham Asset Management, Ray Dalio’s Bridgewater Associates, and Paul Marshall and Ian Wace’s Marshall Wace LLP.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as SVB Financial Group (NASDAQ:SIVB) but similarly valued. We will take a look at EPAM Systems Inc (NYSE:EPAM), Trip.com Group Limited (NASDAQ:TCOM), Entergy Corporation (NYSE:ETR), AmerisourceBergen Corporation (NYSE:ABC), EXACT Sciences Corporation (NASDAQ:EXAS), Teradyne, Inc. (NASDAQ:TER), and POSCO (NYSE:PKX). This group of stocks’ market values are closest to SIVB’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 35.1 hedge funds with bullish positions and the average amount invested in these stocks was $1035 million. That figure was $708 million in SIVB’s case. AmerisourceBergen Corporation (NYSE:ABC) is the most popular stock in this table. On the other hand POSCO (NYSE:PKX) is the least popular one with only 10 bullish hedge fund positions. SVB Financial Group (NASDAQ:SIVB) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SIVB is 59.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.2% in 2021 through April 12th and still beat the market by 1.5 percentage points. A small number of hedge funds were also right about betting on SIVB as the stock returned 29.1% since the end of the fourth quarter (through 4/12) and outperformed the market by an even larger margin.

Disclosure: None. This article was originally published at Insider Monkey.