WestAmerica Bancorp. (WABC): Hedge Funds Are Bullish and Insiders Are Bearish, What Should You Do?

WestAmerica Bancorp. (NASDAQ:WABC) was in 8 hedge funds’ portfolio at the end of March. WABC has experienced an increase in activity from the world’s largest hedge funds recently. There were 7 hedge funds in our database with WABC positions at the end of the previous quarter.

According to most investors, hedge funds are seen as worthless, outdated investment vehicles of the past. While there are greater than 8000 funds in operation at the moment, we at Insider Monkey look at the bigwigs of this club, about 450 funds. It is estimated that this group oversees the lion’s share of the hedge fund industry’s total asset base, and by keeping an eye on their top stock picks, we have identified a number of investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Equally as integral, optimistic insider trading sentiment is a second way to break down the investments you’re interested in. As the old adage goes: there are a variety of incentives for an executive to downsize shares of his or her company, but just one, very clear reason why they would behave bullishly. Several empirical studies have demonstrated the useful potential of this tactic if you know what to do (learn more here).

Now, let’s take a glance at the recent action surrounding WestAmerica Bancorp. (NASDAQ:WABC).

How are hedge funds trading WestAmerica Bancorp. (NASDAQ:WABC)?

At Q1’s end, a total of 8 of the hedge funds we track held long positions in this stock, a change of 14% from the previous quarter.

As aggregate interest increased, key money managers have been driving this bullishness. D E Shaw, managed by D. E. Shaw, initiated the biggest position in WestAmerica Bancorp. (NASDAQ:WABC). D E Shaw had 0.4 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also made a $0.3 million investment in the stock during the quarter. The only other fund with a brand new WABC position is Matthew Hulsizer’s PEAK6 Capital Management.

How are insiders trading WestAmerica Bancorp. (NASDAQ:WABC)?

Insider buying is at its handiest when the company in focus has experienced transactions within the past six months. Over the latest half-year time period, WestAmerica Bancorp. (NASDAQ:WABC) has experienced zero unique insiders buying, and 4 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to WestAmerica Bancorp. (NASDAQ:WABC). These stocks are BBCN Bancorp, Inc. (NASDAQ:BBCN), PacWest Bancorp (NASDAQ:PACW), Glacier Bancorp, Inc. (NASDAQ:GBCI), CVB Financial Corp. (NASDAQ:CVBF), and Western Alliance Bancorporation (NYSE:WAL). This group of stocks are in the regional – pacific banks industry and their market caps match WABC’s market cap.

With the returns exhibited by our tactics, retail investors must always keep an eye on hedge fund and insider trading activity, and WestAmerica Bancorp. (NASDAQ:WABC) applies perfectly to this mantra.

Click here to learn why you should track hedge funds