Should You Buy Cathay General Bancorp (CATY)?

Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track more than 700 prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile gigantic failures like hedge funds’ recent losses in Valeant. Let’s take a closer look at what the funds we track think about Cathay General Bancorp (NASDAQ:CATY) in this article.

Cathay General Bancorp (NASDAQ:CATY)’s stock has advanced by 23% since the beginning of the year, but the stock still remains overlooked by most investors from our database. Nevertheless, during the third quarter, the number of funds with long positions went up to 12 from 11. 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 ALLETE Inc (NYSE:ALE), Ternium S.A. (ADR) (NYSE:TX), and Take-Two Interactive Software, Inc. (NASDAQ:TTWO) to gather more data points.

If you’d ask most investors, hedge funds are assumed to be underperforming, old investment vehicles of years past. While there are greater than 8000 funds trading at the moment, Our experts choose to focus on the upper echelon of this group, approximately 700 funds. It is estimated that this group of investors manage the majority of the smart money’s total capital, and by keeping track of their inimitable stock picks, Insider Monkey has discovered numerous investment strategies that have historically defeated the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy outpaced the S&P 500 index by 12 percentage points per year for a decade in their back tests.

With all of this in mind, we’re going to take a glance at the latest action encompassing Cathay General Bancorp (NASDAQ:CATY).

How are hedge funds trading Cathay General Bancorp (NASDAQ:CATY)?

At the Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 9% from the second quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Columbus Circle Investors, managed by Clifford Fox, holds the largest position in Cathay General Bancorp (NASDAQ:CATY). Columbus Circle Investors has a $21.3 million position in the stock, comprising 0.2% of its 13F portfolio. On Columbus Circle Investors’s heels is Millennium Management, managed by Israel Englander, which holds a $12.4 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other professional money managers that hold long positions include Jim Simons’s Renaissance Technologies, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Cliff Asness’s AQR Capital Management.