Is SVB Financial Group (SIVB) A Good Stock To Buy?

There are several ways to beat the market, and investing in small cap stocks has historically been one of them. We like to improve the odds of beating the market further by examining what famous hedge fund operators such as Carl Icahn and George Soros think. Those hedge fund operators make billions of dollars each year by hiring the best and the brightest to do research on stocks, including small cap stocks that big brokerage houses simply don’t cover. Because of Carl Icahn and other successful funds’ exemplary historical records, we pay attention to their small cap picks. In this article, we use hedge fund filing data to analyze SVB Financial Group (NASDAQ:SIVB) .

SVB Financial Group (NASDAQ:SIVB)investors should pay attention to a decrease in activity from the world’s largest hedge funds recently. SIVB was in 19 hedge funds’ portfolios at the end of September. There were 21 hedge funds in our database with SIVB holdings at the end of the previous quarter. At the end of this article we will also compare SIVB to other stocks including Yamana Gold Inc. (USA) (NYSE:AUY), East West Bancorp, Inc. (NASDAQ:EWBC), and Starwood Property Trust, Inc. (NYSE:STWD) to get a better sense of its popularity.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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What does the smart money think about SVB Financial Group (NASDAQ:SIVB)?

At the end of the third quarter, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a drop of 10% from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards SIVB over the last 5 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Fisher Asset Management, led by Ken Fisher, holds the number one position in SVB Financial Group (NASDAQ:SIVB). Fisher Asset Management has a $180.2 million position in the stock. The second largest stake is held by Citadel Investment Group, led by Ken Griffin, which holds a $75.9 million position. Remaining hedge funds and institutional investors that hold long positions consist of Martin D. Sass’ MD Sass, Matthew Lindenbaum’s Basswood Capital and Robert Pohly’s Samlyn Capital. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

We already know that not all hedge funds are bullish on the stock and some hedge funds actually dropped their positions entirely. It’s worth mentioning that Israel Englander’s Millennium Management dropped the largest position of the “upper crust” of funds watched by Insider Monkey, totaling about $13.7 million in stock. George Hall’s fund, Clinton Group, also sold off its stock, about $2.2 million worth.

Let’s check out hedge fund activity in other stocks similar to SVB Financial Group (NASDAQ:SIVB). We will take a look at Yamana Gold Inc. (USA) (NYSE:AUY), East West Bancorp, Inc. (NASDAQ:EWBC), Starwood Property Trust, Inc. (NYSE:STWD), and American Greetings Corporation (NYSE:AM). This group of stocks’ market caps are similar to SIVB’s market cap.

As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $235 million. That figure was $501 million in SIVB’s case. East West Bancorp, Inc. (NASDAQ:EWBC) is the most popular stock in this table. On the other hand American Greetings Corporation (NYSE:AM) is the least popular one with only 5 bullish hedge fund positions. SVB Financial Group (NASDAQ:SIVB) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard EWBC might be a better candidate to consider taking a long position in.

Disclosure: None