Concerns over a shift in Fed’s easy monetary policy have hit several hedge funds hard during the third quarter. A number of sectors are in correction territory. More importantly, Russell 2000 ETF (IWM) underperformed the larger S&P 500 ETF (SPY) by more than 14 percentage points between June 25, 2015 and October 30, 2015. Hedge funds and institutional investors tracked by Insider Monkey usually invest a disproportionate amount of their portfolios in smaller cap stocks. We have been receiving indications that hedge funds were paring back their overall exposure and this is one of the factors behind the recent movements in major indices. In this article, we will take a closer look at hedge fund sentiment towards WestAmerica Bancorp. (NASDAQ:WABC).
WestAmerica Bancorp. (NASDAQ:WABC) was in 6 hedge funds’ portfolios at the end of the third quarter of 2015. WABC has experienced a decrease in activity from the world’s largest hedge funds in recent months. There were 9 hedge funds in our database with WABC positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Viper Energy Partners LP (NASDAQ:VNOM), S & T Bancorp Inc (NASDAQ:STBA), and Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA) to gather more data points.
Follow Westamerica Bancorporation (NASDAQ:WABC)
Follow Westamerica Bancorporation (NASDAQ:WABC)
To the average investor there are plenty of signals stock market investors put to use to appraise stocks. A pair of the most underrated signals are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the best picks of the top fund managers can outpace the S&P 500 by a significant margin (see the details here).
Keeping this in mind, let’s take a gander at the key action regarding WestAmerica Bancorp. (NASDAQ:WABC).
What does the smart money think about WestAmerica Bancorp. (NASDAQ:WABC)?
Heading into Q4, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a plunge of 33% from the second quarter. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Neil Chriss’s Hutchin Hill Capital has the largest position in WestAmerica Bancorp. (NASDAQ:WABC), worth close to $8.9 million, accounting for 0.3% of its total 13F portfolio. Sitting at the No. 2 spot is Renaissance Technologies, managed by Jim Simons, which holds a $3.6 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that are bullish comprise Ken Griffin’s Citadel Investment Group, Ken Fisher’s Fisher Asset Management and John Overdeck and David Siegel’s Two Sigma Advisors.
Because WestAmerica Bancorp. (NASDAQ:WABC) has experienced bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there exists a select few money managers who were dropping their full holdings heading into Q4. At the top of the heap, Paul Marshall and Ian Wace’s Marshall Wace LLP sold off the biggest position of all the hedgies watched by Insider Monkey, totaling about $1.1 million in stock, and Israel Englander’s Millennium Management was right behind this move, as the fund dropped about $0.6 million worth of shares. These bearish behaviors are important to note, as total hedge fund interest fell by 3 funds heading into Q4.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as WestAmerica Bancorp. (NASDAQ:WABC) but similarly valued. These stocks are Viper Energy Partners LP (NASDAQ:VNOM), S & T Bancorp Inc (NASDAQ:STBA), Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA), and Cubic Corporation (NYSE:CUB). This group of stocks’ market valuations match WABC’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VNOM | 5 | 20812 | 0 |
| STBA | 5 | 7375 | -1 |
| MNTA | 17 | 277693 | -2 |
| CUB | 16 | 90819 | -6 |
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $99 million. That figure was a meager $16 million in WABC’s case. Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA) is the most popular stock in this table. On the other hand Viper Energy Partners LP (NASDAQ:VNOM) is the least popular one with only 5 bullish hedge fund positions. WestAmerica Bancorp. (NASDAQ:WABC) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard MNTA might be a better candidate to consider a long position.
