To many of your fellow readers, hedge funds are perceived as bloated, old investment vehicles of an era lost to time. Although there are over 8,000 hedge funds trading currently, Insider Monkey focuses on the crème de la crème of this club, around 525 funds. It is assumed that this group has its hands on the majority of the hedge fund industry's total assets, and by keeping an eye on their highest quality picks, we've deciphered a few investment strategies that have historically beaten the market. Our small-cap hedge fund strategy outperformed 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 topped the S&P 500 index by 33 percentage points in 11 months (find the details here).
Just as useful, bullish insider trading activity is a second way to analyze the world of equities. There are plenty of reasons for a corporate insider to get rid of shares of his or her company, but only one, very simple reason why they would buy. Several empirical studies have demonstrated the valuable potential of this strategy if piggybackers understand what to do (learn more here).
Thus, we're going to examine the recent info about City National Corp (NYSE:CYN).
In preparation for the third quarter, a total of 22 of the hedge funds we track held long positions in this stock, a change of 22% from one quarter earlier. With hedgies' sentiment swirling, there exists an "upper tier" of notable hedge fund managers who were upping their stakes considerably.
When using filings from the hedgies we track, Ariel Investments, managed by John W. Rogers, holds the biggest position in City National Corp (NYSE:CYN). Ariel Investments has a $150.9 million position in the stock, comprising 2.5% of its 13F portfolio. Coming in second is Robert Pohly of Samlyn Capital, with a $56.2 million position; the fund has 1.6% of its 13F portfolio invested in the stock. Other hedge funds that are bullish include Martin Whitman's Third Avenue Management, Matthew Lindenbaum's Basswood Capital and Dmitry Balyasny's Balyasny Asset Management.
As one would understandably expect, certain bigger names have jumped into City National Corp (NYSE:CYN) headfirst. Ariel Investments, managed by John W. Rogers, initiated the biggest position in City National Corp (NYSE:CYN). Ariel Investments had 150.9 million invested in the company at the end of the quarter. Robert Pohly's Samlyn Capital also made a $56.2 million investment in the stock during the quarter. The following funds were also among the new CYN investors: Martin Whitman's Third Avenue Management, Matthew Lindenbaum's Basswood Capital, and Dmitry Balyasny's Balyasny Asset Management.
Insider buying is best served when the company we're looking at has experienced transactions within the past six months. Over the last half-year time period, City National Corp (NYSE:CYN) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We'll go over the relationship between both of these indicators in other stocks similar to City National Corp (NYSE:CYN). These stocks are Cathay General Bancorp (NASDAQ:CATY), Zions Bancorporation (NASDAQ:ZION), Bank of Hawaii Corporation (NYSE:BOH), East West Bancorp, Inc. (NASDAQ:EWBC), and SVB Financial Group (NASDAQ:SIVB). This group of stocks are in the regional - pacific banks industry and their market caps match CYN's market cap.