Is Washington Banking Co (NASDAQ:WBCO) the right pick for your portfolio? The best stock pickers are getting more optimistic. The number of long hedge fund positions went up by 2 in recent months.
To most investors, hedge funds are viewed as unimportant, old financial vehicles of years past. While there are over 8000 funds trading at the moment, we hone in on the leaders of this club, about 450 funds. Most estimates calculate that this group oversees the lion’s share of the hedge fund industry’s total capital, and by keeping an eye on their best equity investments, we have identified a number of investment strategies that have historically beaten the broader indices. 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 started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Equally as beneficial, bullish insider trading sentiment is another way to break down the marketplace. As the old adage goes: there are a number of stimuli for a corporate insider to drop shares of his or her company, but just one, very simple reason why they would behave bullishly. Many empirical studies have demonstrated the valuable potential of this tactic if “monkeys” know what to do (learn more here).
Now, let’s take a gander at the latest action regarding Washington Banking Co (NASDAQ:WBCO).
How have hedgies been trading Washington Banking Co (NASDAQ:WBCO)?
At year’s end, a total of 5 of the hedge funds we track were bullish in this stock, a change of 67% from the previous quarter. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their stakes meaningfully.
When looking at the hedgies we track, Eric D. Hovde’s Hovde Capital had the biggest position in Washington Banking Co (NASDAQ:WBCO), worth close to $0.3 million, accounting for 0.3% of its total 13F portfolio. The second largest stake is held by John Overdeck and David Siegel of Two Sigma Advisors, with a $0.3 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining hedgies that are bullish include Israel Englander’s Millennium Management, Peter Algert and Kevin Coldiron’s Algert Coldiron Investors and Jim Simons’s Renaissance Technologies.
Now, specific money managers have been driving this bullishness. Hovde Capital, managed by Eric D. Hovde, initiated the most outsized position in Washington Banking Co (NASDAQ:WBCO). Hovde Capital had 0.3 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $0.2 million position during the quarter.
What have insiders been doing with Washington Banking Co (NASDAQ:WBCO)?
Bullish insider trading is most useful when the company in question has seen transactions within the past half-year. Over the latest 180-day time frame, Washington Banking Co (NASDAQ:WBCO) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Washington Banking Co (NASDAQ:WBCO). These stocks are Bridge Capital Holdings (NASDAQ:BBNK), Pacific Continental Corporation (NASDAQ:PCBK), Preferred Bank (NASDAQ:PFBC), Heritage Financial Corporation (NASDAQ:HFWA), and Bank of Marin Bancorp (NASDAQ:BMRC). This group of stocks are the members of the regional – pacific banks industry and their market caps are closest to WBCO’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Bridge Capital Holdings (NASDAQ:BBNK) | 0 | 0 | 1 |
| Pacific Continental Corporation (NASDAQ:PCBK) | 7 | 1 | 0 |
| Preferred Bank (NASDAQ:PFBC) | 2 | 0 | 0 |
| Heritage Financial Corporation (NASDAQ:HFWA) | 4 | 1 | 3 |
| Bank of Marin Bancorp (NASDAQ:BMRC) | 0 | 1 | 4 |
With the returns demonstrated by our studies, everyday investors should always monitor hedge fund and insider trading activity, and Washington Banking Co (NASDAQ:WBCO) applies perfectly to this mantra.
