Like everyone else, elite investors make mistakes. Some of their top consensus picks, such as Micron and Anadarko Petroleum, have not done well during the last 12 months ending in October due to various reasons. Nevertheless, the data show elite investors’ consensus picks have done well on average. The top 30 S&P 500 stocks among hedge funds at the end of September 2014 yielded an average return of 9.5% during the last four quarters ending in October and sixty three percent of these 30 stocks outperformed the market. S&P 500 Index returned only 5.2% during the same period and less than 49% of its constituents managed to beat this return. Because their consensus picks have done well, we pay attention to what elite funds think before doing extensive research on a stock. In this article, we take a closer look at Independent Bank Group Inc (NASDAQ:IBTX) from the perspective of those elite funds.
Independent Bank Group Inc (NASDAQ:IBTX) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 10 hedge funds’ portfolios at the end of the third quarter of 2015. At the end of this article we will also compare IBTX to other stocks including Central Pacific Financial Corp. (NYSE:CPF), Orbotech Ltd. (NASDAQ:ORBK), and Callaway Golf Co (NYSE:ELY) to get a better sense of its popularity.
Follow Independent Bank Group Inc. (NASDAQ:IBTX)
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Keeping this in mind, we’re going to take a glance at the new action surrounding Independent Bank Group Inc (NASDAQ:IBTX).
How have hedgies been trading Independent Bank Group Inc (NASDAQ:IBTX)?
Of the funds tracked by Insider Monkey, Weatherbie Capital, managed by Matthew A. Weatherbie, holds the most valuable position in Independent Bank Group Inc (NASDAQ:IBTX). Weatherbie Capital has a $11.3 million position in the stock, comprising 1.3% of its 13F portfolio. On Weatherbie Capital’s heels is Hutchin Hill Capital, managed by Neil Chriss, which holds a $7.4 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that are bullish contain Paul Magidson, Jonathan Cohen. And Ostrom Enders’s Castine Capital Management, Matthew Lindenbaum’s Basswood Capital and William Black’s Consector Capital.
Because Independent Bank Group Inc (NASDAQ:IBTX) has experienced declining sentiment from the aggregate hedge fund industry, logic holds that there was a specific group of fund managers who were dropping their positions entirely heading into Q4. It’s worth mentioning that Chuck Royce’s Royce & Associates dropped the biggest investment of all the hedgies watched by Insider Monkey, comprising an estimated $2.3 million in stock. Israel Englander’s fund, Millennium Management, also said goodbye to its stock, about $1.7 million worth. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Independent Bank Group Inc (NASDAQ:IBTX) but similarly valued. These stocks are Central Pacific Financial Corp. (NYSE:CPF), Orbotech Ltd. (NASDAQ:ORBK), Callaway Golf Co (NYSE:ELY), and PROS Holdings, Inc. (NYSE:PRO). This group of stocks’ market values are similar to IBTX’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CPF | 18 | 97338 | 4 |
| ORBK | 16 | 87214 | -1 |
| ELY | 23 | 145267 | -1 |
| PRO | 5 | 80152 | 1 |
As you can see these stocks had an average of 15.5 hedge funds with bullish positions and the average amount invested in these stocks was $102 million. That figure was $29 million in IBTX’s case. Callaway Golf Co (NYSE:ELY) is the most popular stock in this table. On the other hand PROS Holdings, Inc. (NYSE:PRO) is the least popular one with only 5 bullish hedge fund positions. Independent Bank Group Inc (NASDAQ:IBTX) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ELY might be a better candidate to consider a long position.
