Western Alliance Bancorporation (WAL): Insiders Aren’t Crazy About It But Hedge Funds Love It

To many traders, hedge funds are assumed to be bloated, outdated financial tools of an era lost to time. Although there are over 8,000 hedge funds in operation today, this site looks at the leaders of this group, around 525 funds. Analysts calculate that this group controls the majority of all hedge funds’ total capital, and by keeping an eye on their best picks, we’ve revealed a number of investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually 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 outclassed the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).

Equally as necessary, positive insider trading sentiment is a second way to look at the investments you’re interested in. As the old adage goes: there are a number of incentives for an upper level exec to drop shares of his or her company, but only one, very simple reason why they would behave bullishly. Several academic studies have demonstrated the useful potential of this tactic if piggybackers know what to do (learn more here).

Thus, let’s analyze the latest info surrounding Western Alliance Bancorporation (NYSE:WAL).

What does the smart money think about Western Alliance Bancorporation (NYSE:WAL)?

At the end of the second quarter, a total of 18 of the hedge funds we track were bullish in this stock, a change of 64% from the first quarter. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their stakes significantly.

According to our 13F database, Ken Griffin’s Citadel Investment Group had the largest position in Western Alliance Bancorporation (NYSE:WAL), worth close to $19.5 million, accounting for less than 0.1%% of its total 13F portfolio. Coming in second is Royce & Associates, managed by Chuck Royce, which held a $9.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds that are bullish include Jim Simons’s Renaissance Technologies, John Brennan’s Sirios Capital Management and Israel Englander’s Millennium Management.

As industrywide interest increased, particular hedge funds have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, established the most valuable position in Western Alliance Bancorporation (NYSE:WAL). Citadel Investment Group had 19.5 million invested in the company at the end of the quarter. Chuck Royce’s Royce & Associates also initiated a $9.5 million position during the quarter. The other funds with new positions in the stock are Jim Simons’s Renaissance Technologies, John Brennan’s Sirios Capital Management, and Israel Englander’s Millennium Management.

How are insiders trading Western Alliance Bancorporation (NYSE:WAL)?

Insider buying is particularly usable when the company in question has experienced transactions within the past 180 days. Over the last half-year time frame, Western Alliance Bancorporation (NYSE:WAL) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also take a look at the relationship between both of these indicators in other stocks similar to Western Alliance Bancorporation (NYSE:WAL). These stocks are BBCN Bancorp, Inc. (NASDAQ:BBCN), PacWest Bancorp (NASDAQ:PACW), Glacier Bancorp, Inc. (NASDAQ:GBCI), WestAmerica Bancorp. (NASDAQ:WABC), and CVB Financial Corp. (NASDAQ:CVBF). This group of stocks are in the regional – pacific banks industry and their market caps match WAL’s market cap.

Using the returns shown by Insider Monkey’s tactics, average investors should always track hedge fund and insider trading sentiment, and Western Alliance Bancorporation (NYSE:WAL) is an important part of this process.

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