Should You Buy Brookline Bancorp, Inc. (BRKL)?

Brookline Bancorp, Inc. (NASDAQ:BRKL) has experienced an increase in hedge fund sentiment lately.

In the eyes of most stock holders, hedge funds are assumed to be slow, old financial vehicles of yesteryear. While there are over 8000 funds trading at present, we at Insider Monkey hone in on the bigwigs of this group, about 450 funds. Most estimates calculate that this group has its hands on most of all hedge funds’ total asset base, and by keeping an eye on their highest performing picks, we have identified a number of investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 24 percentage points in 7 months (see the details here).

Just as integral, optimistic insider trading sentiment is a second way to parse down the stock market universe. Obviously, there are lots of incentives for a corporate insider to get rid of shares of his or her company, but just one, very clear reason why they would initiate a purchase. Several academic studies have demonstrated the impressive potential of this tactic if investors understand what to do (learn more here).

Now, let’s take a glance at the key action encompassing Brookline Bancorp, Inc. (NASDAQ:BRKL).

How have hedgies been trading Brookline Bancorp, Inc. (NASDAQ:BRKL)?

At the end of the fourth quarter, a total of 10 of the hedge funds we track were long in this stock, a change of 25% from the previous quarter. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their holdings considerably.

Of the funds we track, Polaris Capital Management, managed by Bernard Horn, holds the most valuable position in Brookline Bancorp, Inc. (NASDAQ:BRKL). Polaris Capital Management has a $10.8 million position in the stock, comprising 0.8% of its 13F portfolio. The second largest stake is held by Jim Simons of Renaissance Technologies, with a $5.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedgies that hold long positions include Chuck Royce’s Royce & Associates, Ken Griffin’s Citadel Investment Group and Gregg J. Powers’s Private Capital Management.

Consequently, some big names were leading the bulls’ herd. Tudor Investment Corp, managed by Paul Tudor Jones, initiated the most outsized position in Brookline Bancorp, Inc. (NASDAQ:BRKL). Tudor Investment Corp had 0.4 million invested in the company at the end of the quarter. Steven Cohen’s SAC Capital Advisors also made a $0.1 million investment in the stock during the quarter.

What have insiders been doing with Brookline Bancorp, Inc. (NASDAQ:BRKL)?

Insider trading activity, especially when it’s bullish, is best served when the company in question has seen transactions within the past six months. Over the latest six-month time frame, Brookline Bancorp, Inc. (NASDAQ:BRKL) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Brookline Bancorp, Inc. (NASDAQ:BRKL). These stocks are Flushing Financial Corporation (NASDAQ:FFIC), Flagstar Bancorp Inc (NYSE:FBC), Kearny Financial Corp. (NASDAQ:KRNY), Banner Corporation (NASDAQ:BANR), and Berkshire Hills Bancorp, Inc. (NYSE:BHLB). This group of stocks are in the savings & loans industry and their market caps resemble BRKL’s market cap.