We can judge whether PacWest Bancorp (NASDAQ:PACW) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, research shows that these picks historically outperformed the market when we factor in known risk factors.
Is PacWest Bancorp (NASDAQ:PACW) a bargain? Money managers are turning bullish. The number of bullish hedge fund bets advanced by 1 in recent months. PACW was in 16 hedge funds’ portfolios at the end of September. There were 15 hedge funds in our database with PACW holdings at the end of the previous quarter. At the end of this article we will also compare PACW to other stocks including Burlington Stores Inc (NYSE:BURL), Nordson Corporation (NASDAQ:NDSN), and Live Nation Entertainment, Inc. (NYSE:LYV) to get a better sense of its popularity.
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What does the smart money think about PacWest Bancorp (NASDAQ:PACW)?
Heading into the fourth quarter of 2016, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 7% from the previous quarter. The graph below displays the number of hedge funds with bullish position in PACW 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.
When looking at the institutional investors followed by Insider Monkey, Ken Fisher’s Fisher Asset Management has the largest position in PacWest Bancorp (NASDAQ:PACW), worth close to $91.8 million. The second largest stake is held by Cardinal Capital, led by Amy Minella, holding a $89.9 million position; the fund has 4.2% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish comprise Matthew Lindenbaum’s Basswood Capital and Paul Magidson, Jonathan Cohen, and Ostrom Enders’ Castine Capital Management. 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.
As aggregate interest increased, some big names were breaking ground themselves. Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, initiated the largest position in PacWest Bancorp (NASDAQ:PACW). Arrowstreet Capital had $1.1 million invested in the company at the end of the quarter. Matthew Tewksbury’s Stevens Capital Management also made a $0.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Ken Griffin’s Citadel Investment Group, Mike Vranos’ Ellington, and Israel Englander’s Millennium Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as PacWest Bancorp (NASDAQ:PACW) but similarly valued. These stocks are Burlington Stores Inc (NYSE:BURL), Nordson Corporation (NASDAQ:NDSN), Live Nation Entertainment, Inc. (NYSE:LYV), and Banco Bradesco SA (ADR) (NYSE:BBD). This group of stocks’ market values match PACW’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BURL | 36 | 814807 | 2 |
| NDSN | 14 | 81845 | -8 |
| LYV | 32 | 495488 | -1 |
| BBD | 13 | 323892 | 3 |
As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $429 million. That figure was $259 million in PACW’s case. Burlington Stores Inc (NYSE:BURL) is the most popular stock in this table. On the other hand Banco Bradesco SA (ADR) (NYSE:BBD) is the least popular one with only 13 bullish hedge fund positions. PacWest Bancorp (NASDAQ:PACW) 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 BURL might be a better candidate to consider taking a long position in.
Disclosure: None
