If you’d ask most shareholders, hedge funds are assumed to be underperforming, outdated investment vehicles of yesteryear. While there are over 8000 funds trading at the moment, we at Insider Monkey look at the upper echelon of this club, about 450 funds. It is estimated that this group oversees the majority of the hedge fund industry’s total asset base, and by tracking their highest performing equity investments, we have unearthed a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per 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 trumped the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Just as integral, bullish insider trading activity is a second way to parse down the financial markets. As the old adage goes: there are many motivations for an executive to get rid of shares of his or her company, but only one, very clear reason why they would buy. Several empirical studies have demonstrated the valuable potential of this tactic if you know where to look (learn more here).
With all of this in mind, we’re going to take a glance at the latest action encompassing U.S. Bancorp (NYSE:USB).
Hedge fund activity in U.S. Bancorp (NYSE:USB)
At Q1’s end, a total of 43 of the hedge funds we track held long positions in this stock, a change of -4% from the first quarter. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were boosting their holdings meaningfully.
Of the funds we track, Warren Buffett’s Berkshire Hathaway had the biggest position in U.S. Bancorp (NYSE:USB), worth close to $2.0853 billion, accounting for 2.5% of its total 13F portfolio. Sitting at the No. 2 spot is Donald Yacktman of Yacktman Asset Management, with a $430.2 million position; 2.2% of its 13F portfolio is allocated to the company. Other peers that are bullish include Jean-Marie Eveillard’s First Eagle Investment Management, Ken Griffin’s Citadel Investment Group and Phill Gross and Robert Atchinson’s Adage Capital Management.
Since U.S. Bancorp (NYSE:USB) has faced a declination in interest from the entirety of the hedge funds we track, it’s safe to say that there is a sect of funds who were dropping their full holdings in Q1. Interestingly, Matthew Tewksbury’s Stevens Capital Management dumped the biggest position of all the hedgies we monitor, totaling an estimated $23 million in stock.. Andrew Sandler’s fund, Sandler Capital Management, also cut its stock, about $6.5 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 2 funds in Q1.
What do corporate executives and insiders think about U.S. Bancorp (NYSE:USB)?
Insider buying is most useful when the primary stock in question has experienced transactions within the past 180 days. Over the last 180-day time frame, U.S. Bancorp (NYSE:USB) has experienced zero unique insiders purchasing, and 13 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to U.S. Bancorp (NYSE:USB). These stocks are Associated Banc Corp (NASDAQ:ASBC), TFS Financial Corporation (NASDAQ:TFSL), Huntington Bancshares Incorporated (NASDAQ:HBAN), Comerica Incorporated (NYSE:CMA), and Fifth Third Bancorp (NASDAQ:FITB). This group of stocks are the members of the regional – midwest banks industry and their market caps are closest to USB’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Associated Banc Corp (NASDAQ:ASBC) | 9 | 3 | 3 |
| TFS Financial Corporation (NASDAQ:TFSL) | 16 | 0 | 1 |
| Huntington Bancshares Incorporated (NASDAQ:HBAN) | 24 | 7 | 3 |
| Comerica Incorporated (NYSE:CMA) | 20 | 0 | 4 |
| Fifth Third Bancorp (NASDAQ:FITB) | 26 | 0 | 2 |
With the results shown by the aforementioned studies, everyday investors must always keep an eye on hedge fund and insider trading sentiment, and U.S. Bancorp (NYSE:USB) shareholders fit into this picture quite nicely.
