In the eyes of most shareholders, hedge funds are seen as worthless, outdated financial tools of yesteryear. While there are more than 8000 funds with their doors open at present, we at Insider Monkey hone in on the elite of this club, about 450 funds. It is widely believed that this group has its hands on most of the hedge fund industry’s total asset base, and by monitoring their highest performing equity investments, we have found a few investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum 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 all of our picks from August).
Just as beneficial, bullish insider trading activity is a second way to parse down the stock market universe. Just as you’d expect, there are lots of motivations for a corporate insider to drop shares of his or her company, but just one, very simple reason why they would behave bullishly. Several academic studies have demonstrated the market-beating potential of this method if piggybackers understand what to do (learn more here).
Now, we’re going to take a gander at the latest action regarding National Penn Bancshares (NASDAQ:NPBC).
What does the smart money think about National Penn Bancshares (NASDAQ:NPBC)?
At the end of the fourth quarter, a total of 13 of the hedge funds we track held long positions in this stock, a change of 8% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their holdings meaningfully.
Of the funds we track, Richard S. Pzena’s Pzena Investment Management had the most valuable position in National Penn Bancshares (NASDAQ:NPBC), worth close to $25.5 million, comprising 0.2% of its total 13F portfolio. Sitting at the No. 2 spot is Ric Dillon of Diamond Hill Capital, with a $11.2 million position; 0.1% of its 13F portfolio is allocated to the company. Other peers that are bullish include Cliff Asness’s AQR Capital Management, Israel Englander’s Millennium Management and Jim Simons’s Renaissance Technologies.
Consequently, some big names have been driving this bullishness. Renaissance Technologies, managed by Jim Simons, created the most valuable position in National Penn Bancshares (NASDAQ:NPBC). Renaissance Technologies had 1.1 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also made a $0.4 million investment in the stock during the quarter. The only other fund with a brand new NPBC position is Mike Vranos’s Ellington.
How have insiders been trading National Penn Bancshares (NASDAQ:NPBC)?
Insider purchases made by high-level executives is at its handiest when the primary stock in question has experienced transactions within the past 180 days. Over the latest half-year time period, National Penn Bancshares (NASDAQ:NPBC) has seen 2 unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to National Penn Bancshares (NASDAQ:NPBC). These stocks are Fulton Financial Corp (NASDAQ:FULT), Susquehanna Bancshares Inc (NASDAQ:SUSQ), Webster Financial Corporation (NYSE:WBS), Community Bank System, Inc. (NYSE:CBU), and Valley National Bancorp (NYSE:VLY). This group of stocks belong to the regional – northeast banks industry and their market caps resemble NPBC’s market cap.
