Synovus Financial Corp. (SNV): Are Hedge Funds Right About This Stock?

Is Synovus Financial Corp. (NYSE:SNV) a good bet right now? We like to analyze hedge fund sentiment before doing days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy league graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments (for some reason media paid a ton of attention to Ackman’s gigantic JC Penney and Valeant failures) and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.

Is Synovus Financial Corp. (NYSE:SNV) the right investment to pursue these days? Hedge funds are in a pessimistic mood. The number of bullish hedge fund positions decreased by 5 lately. SNV was in 21 hedge funds’ portfolios at the end of September. There were 26 hedge funds in our database with SNV positions at the end of the previous quarter. 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 Opko Health Inc. (NYSE:OPK), ABIOMED, Inc. (NASDAQ:ABMD), and Bright Horizons Family Solutions Inc (NYSE:BFAM) to gather more data points.

If you’d ask most traders, hedge funds are viewed as worthless, old investment vehicles of yesteryear. While there are over an 8000 funds in operation at present, Our researchers choose to focus on the masters of this club, about 700 funds. These investment experts oversee the lion’s share of the hedge fund industry’s total asset base, and by shadowing their first-class picks, Insider Monkey has unsheathed a number of investment strategies that have historically outrun Mr. Market. Insider Monkey’s small-cap hedge fund strategy outpaced the S&P 500 index by 12 percentage points annually for a decade in their back tests.

Now, we’re going to take a peek at the latest action regarding Synovus Financial Corp. (NYSE:SNV).

What does the smart money think about Synovus Financial Corp. (NYSE:SNV)?

At the end of the third quarter, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of -19% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Millennium Management, managed by Israel Englander, holds the biggest position in Synovus Financial Corp. (NYSE:SNV). Millennium Management has a $93.9 million position in the stock, comprising 0.2% of its 13F portfolio. On Millennium Management’s heels is Matthew Lindenbaum’s Basswood Capital, with a $65.4 million position; the fund has 3.2% of its 13F portfolio invested in the stock. Some other professional money managers that are bullish consist of Ken Griffin’s Citadel Investment Group, Mark Lee’s Forest Hill Capital and Richard S. Pzena’s Pzena Investment Management.

Seeing as Synovus Financial Corp. (NYSE:SNV) has witnessed bearish sentiment from the smart money, we can see that there is a sect of hedge funds who were dropping their entire stakes by the end of the third quarter. Intriguingly, Dmitry Balyasny’s Balyasny Asset Management dropped the largest position of all the hedgies tracked by Insider Monkey, totaling close to $11.6 million in stock, and Steve Cohen’s Point72 Asset Management was right behind this move, as the fund dumped about $6.1 million worth of shares. These moves are important to note, as total hedge fund interest dropped by 5 funds by the end of the third quarter.

Let’s check out hedge fund activity in other stocks similar to Synovus Financial Corp. (NYSE:SNV). We will take a look at Opko Health Inc. (NYSE:OPK), ABIOMED, Inc. (NASDAQ:ABMD), Bright Horizons Family Solutions Inc (NYSE:BFAM), and Eaton Vance Corp (NYSE:EV). This group of stocks’ market valuations are similar to SNV’s market valuation.

As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $201 million, below the $450 million figure in SNV’s case. Opko Health Inc. (NYSE:OPK) is the most popular stock in this table, while Eaton Vance Corp (NYSE:EV) is the least popular one with only 13 bullish hedge fund positions. Synovus Financial Corp. (NYSE:SNV) 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 OPK might be a better candidate to consider a long position.