Is BofI Holding, Inc. (NASDAQ:BOFI) a buy right now? The best stock pickers are taking a bearish view. The number of long hedge fund positions dropped by 1 recently.
In today’s marketplace, there are tons of gauges market participants can use to track Mr. Market. A pair of the most underrated are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top fund managers can outperform their index-focused peers by a significant amount (see just how much).
Just as beneficial, optimistic insider trading activity is a second way to break down the stock market universe. There are a variety of incentives for an upper level exec to drop shares of his or her company, but just one, very clear reason why they would buy. Many empirical studies have demonstrated the useful potential of this strategy if investors know what to do (learn more here).
With these “truths” under our belt, it’s important to take a gander at the recent action surrounding BofI Holding, Inc. (NASDAQ:BOFI).
What have hedge funds been doing with BofI Holding, Inc. (NASDAQ:BOFI)?
At year’s end, a total of 6 of the hedge funds we track were bullish in this stock, a change of -14% from one quarter earlier. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes substantially.
Of the funds we track, Royce & Associates, managed by Chuck Royce, holds the most valuable position in BofI Holding, Inc. (NASDAQ:BOFI). Royce & Associates has a $14.4 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Jim Simons of Renaissance Technologies, with a $11.4 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining hedge funds with similar optimism include Brett Hendrickson’s Nokomis Capital, Tom Brown’s Second Curve Capital and John Overdeck and David Siegel’s Two Sigma Advisors.
Because BofI Holding, Inc. (NASDAQ:BOFI) has witnessed a declination in interest from the smart money, it’s safe to say that there is a sect of money managers that elected to cut their full holdings in Q4. Interestingly, Richard Driehaus’s Driehaus Capital cut the biggest stake of the 450+ funds we monitor, worth close to $3 million in stock., and Douglas W. Case of Advanced Investment Partners was right behind this move, as the fund sold off about $0.4 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds in Q4.
What have insiders been doing with BofI Holding, Inc. (NASDAQ:BOFI)?
Insider buying is most useful when the company in focus has experienced transactions within the past six months. Over the last half-year time period, BofI Holding, Inc. (NASDAQ:BOFI) has seen zero unique insiders buying, and 5 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to BofI Holding, Inc. (NASDAQ:BOFI). These stocks are Provident New York Bancorp (NYSE:PBNY), Flushing Financial Corporation (NASDAQ:FFIC), Dime Community Bancshares, Inc. (NASDAQ:DCOM), Meridian Interstate Bancorp, Inc. (NASDAQ:EBSB), and Roma Financial Corporation (NASDAQ:ROMA). This group of stocks are the members of the savings & loans industry and their market caps resemble BOFI’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Provident New York Bancorp (NYSE:PBNY) | 2 | 1 | 1 |
| Flushing Financial Corporation (NASDAQ:FFIC) | 5 | 0 | 6 |
| Dime Community Bancshares, Inc. (NASDAQ:DCOM) | 10 | 0 | 7 |
| Meridian Interstate Bancorp, Inc. (NASDAQ:EBSB) | 1 | 4 | 2 |
| Roma Financial Corporation (NASDAQ:ROMA) | 3 | 0 | 0 |
With the returns shown by the aforementioned strategies, retail investors should always keep an eye on hedge fund and insider trading sentiment, and BofI Holding, Inc. (NASDAQ:BOFI) shareholders fit into this picture quite nicely.
