In the eyes of many market players, hedge funds are viewed as useless, outdated financial vehicles of a period lost to current times. Although there are In excess of 8,000 hedge funds trading currently, this site aim at the masters of this club, close to 525 funds. It is widely held that this group controls the lion’s share of all hedge funds’ total assets, and by paying attention to their best picks, we’ve identified a few investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).
Equally as necessary, positive insider trading activity is a second way to look at the investments you’re interested in. Just as you’d expect, there are a number of reasons for an insider to drop shares of his or her company, but only one, very clear reason why they would behave bullishly. Several academic studies have demonstrated the market-beating potential of this strategy if “monkeys” know what to do (learn more here).
Keeping this in mind, it’s important to examine the newest info surrounding Valley National Bancorp (NYSE:VLY).
How are hedge funds trading Valley National Bancorp (NYSE:VLY)?
In preparation for the third quarter, a total of 9 of the hedge funds we track were long in this stock, a change of 0% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their holdings significantly.
When using filings from the hedgies we track, Martin Whitman’s Third Avenue Management had the largest position in Valley National Bancorp (NYSE:VLY), worth close to $13.9 million, comprising 0.3% of its total 13F portfolio. The second largest stake is held by Chuck Royce of Royce & Associates, with a $6.6 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Jim Simons’s Renaissance Technologies, Jane Mendillo’s Harvard Management Co and Matthew Lindenbaum’s Basswood Capital.
Since Valley National Bancorp (NYSE:VLY) has witnessed a fall in interest from upper-tier hedge fund managers, we can see that there was a specific group of hedgies who were dropping their full holdings in Q1. Intriguingly, D. E. Shaw’s D E Shaw said goodbye to the largest position of the 450+ funds we key on, comprising an estimated $1.1 million in call options., and Matthew Hulsizer of PEAK6 Capital Management was right behind this move, as the fund dropped about $1 million worth. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
What do corporate executives and insiders think about Valley National Bancorp (NYSE:VLY)?
Bullish insider trading is most useful when the company we’re looking at has seen transactions within the past 180 days. Over the latest half-year time period, Valley National Bancorp (NYSE:VLY) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll also review the relationship between both of these indicators in other stocks similar to Valley National Bancorp (NYSE:VLY). These stocks are Community Bank System, Inc. (NYSE:CBU), National Penn Bancshares (NASDAQ:NPBC), Fulton Financial Corp (NASDAQ:FULT), Susquehanna Bancshares Inc (NASDAQ:SUSQ), and Webster Financial Corporation (NYSE:WBS). This group of stocks belong to the regional – northeast banks industry and their market caps resemble VLY’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Community Bank System, Inc. (NYSE:CBU) | 4 | 0 | 0 |
| National Penn Bancshares (NASDAQ:NPBC) | 8 | 0 | 0 |
| Fulton Financial Corp (NASDAQ:FULT) | 9 | 0 | 0 |
| Susquehanna Bancshares Inc (NASDAQ:SUSQ) | 14 | 0 | 0 |
| Webster Financial Corporation (NYSE:WBS) | 24 | 0 | 0 |
Using the results demonstrated by the previously mentioned strategies, regular investors must always watch hedge fund and insider trading activity, and Valley National Bancorp (NYSE:VLY) is an important part of this process.
