How do we determine whether Webster Financial Corporation (NYSE:WBS) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
Webster Financial Corporation (NYSE:WBS) has seen an increase in hedge fund sentiment recently. At the end of this article, we will also compare Webster Financial Corporation (NYSE:WBS) to other stocks, including Portland General Electric Company (NYSE:POR), HEICO Corporation (NYSE:HEI), and Akorn, Inc. (NASDAQ:AKRX) to get a better sense of its popularity.
Follow Webster Financial Corp (NYSE:WBS)
Follow Webster Financial Corp (NYSE:WBS)
In the 21st century investor’s toolkit, there are numerous signals market participants put to use to grade stocks. A pair of the most underrated signals are hedge fund and insider trading moves. We have shown that, historically, those who follow the best picks of the top investment managers can outpace their index-focused peers by a solid margin (see the details here).
Keeping this in mind, we’re going to take a gander at the key action encompassing Webster Financial Corporation (NYSE:WBS).
What have hedge funds been doing with Webster Financial Corporation (NYSE:WBS)?
At the end of Q3, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 9% from the second quarter. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Ricky Sandler’s Eminence Capital has the number one position in Webster Financial Corporation (NYSE:WBS), worth close to $127.3 million, comprising 2% of its total 13F portfolio. The second largest stake is held by Fisher Asset Management, managed by Ken Fisher, which holds a $92.6 million position; 0.2% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors with similar optimism consist of Richard S. Pzena’s Pzena Investment Management, Michael Barnes and Arif Inayatullah’s Tricadia Capital Management, and Andrew Immerman and Jeremy Schiffman’s Palestra Capital Management.
With a general bullishness amongst the heavyweights, specific money managers have jumped into Webster Financial Corporation (NYSE:WBS) headfirst. Three Corner Global Investors, managed by Gunnar Overstrom, initiated the biggest position in Webster Financial Corporation (NYSE:WBS). Three Corner Global Investors had $15.5 million invested in the company at the end of the quarter. Renaissance Technologies also initiated a $3.3 million position during the quarter. The following funds were also among the new WBS investors: Vishal Bhutani and Joshua Bederman’s Pyrrho Capital Management, Anton Schutz’s Mendon Capital Advisors, and D E Shaw.
Let’s also examine hedge fund activity in other stocks similar to Webster Financial Corporation (NYSE:WBS). We will take a look at Portland General Electric Company (NYSE:POR), HEICO Corporation (NYSE:HEI), Akorn, Inc. (NASDAQ:AKRX), and Cepheid (NASDAQ:CPHD). This group of stocks’ market caps is closest to Webster Financial Corporation (NYSE:WBS)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| POR | 13 | 159206 | -2 |
| HEI | 26 | 408494 | 5 |
| AKRX | 43 | 438624 | 3 |
| CPHD | 16 | 203000 | -1 |
As you can see, these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $302 million. That figure was $453 million in Webster Financial Corporation (NYSE:WBS)’s case. Akorn, Inc. (NASDAQ:AKRX) is the most popular stock in this table. On the other hand, Portland General Electric Company (NYSE:POR) is the least popular one with only 13 bullish hedge fund positions. Webster Financial Corporation (NYSE:WBS) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Akorn, Inc. (NASDAQ:AKRX) might be a better candidate to consider a long position.
