If you were to ask many of your fellow readers, hedge funds are perceived as bloated, old financial tools of a forgotten age. Although there are more than 8,000 hedge funds trading currently, Insider Monkey aim at the leaders of this club, about 525 funds. It is assumed that this group controls the lion’s share of the hedge fund industry’s total capital, and by keeping an eye on their best investments, we’ve found a number of investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 33 percentage points in 11 months (find the details here).
Just as useful, bullish insider trading activity is a second way to look at the stock market universe. As the old adage goes: there are many motivations for a corporate insider to sell shares of his or her company, but just one, very simple reason why they would behave bullishly. Plenty of empirical studies have demonstrated the useful potential of this tactic if you know where to look (learn more here).
What’s more, we’re going to discuss the latest info for Sterling Financial Corporation (NASDAQ:STSA).
How are hedge funds trading Sterling Financial Corporation (NASDAQ:STSA)?
At the end of the second quarter, a total of 11 of the hedge funds we track were bullish in this stock, a change of 10% from one quarter earlier. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were boosting their stakes substantially.
Consequently, particular hedge funds have jumped into Sterling Financial Corporation (NASDAQ:STSA) headfirst. Renaissance Technologies, managed by Jim Simons, established the largest position in Sterling Financial Corporation (NASDAQ:STSA). Renaissance Technologies had 7.4 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also initiated a $6.8 million position during the quarter. The other funds with new positions in the stock are Bruce Kovner’s Caxton Associates LP, Ken Griffin’s Citadel Investment Group, and Israel Englander’s Millennium Management.
What do corporate executives and insiders think about Sterling Financial Corporation (NASDAQ:STSA)?
Legal insider trading, particularly when it’s bullish, is best served when the company we’re looking at has experienced transactions within the past 180 days. Over the latest 180-day time period, Sterling Financial Corporation (NASDAQ:STSA) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll also take a look at the relationship between both of these indicators in other stocks similar to Sterling Financial Corporation (NASDAQ:STSA). These stocks are Provident Financial Services, Inc. (NYSE:PFS), Astoria Financial Corp (NYSE:AF), Washington Federal Inc. (NASDAQ:WAFD), Capitol Federal Financial, Inc. (NASDAQ:CFFN), and Northwest Bancshares, Inc. (NASDAQ:NWBI). This group of stocks are in the savings & loans industry and their market caps are closest to STSA’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Provident Financial Services, Inc. (NYSE:PFS) | 7 | 0 | 0 |
| Astoria Financial Corp (NYSE:AF) | 15 | 0 | 0 |
| Washington Federal Inc. (NASDAQ:WAFD) | 12 | 0 | 0 |
| Capitol Federal Financial, Inc. (NASDAQ:CFFN) | 16 | 0 | 0 |
| Northwest Bancshares, Inc. (NASDAQ:NWBI) | 11 | 0 | 0 |
Using the returns explained by Insider Monkey’s studies, average investors must always keep one eye on hedge fund and insider trading sentiment, and Sterling Financial Corporation (NASDAQ:STSA) is an important part of this process.
