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Do Hedge Funds and Insiders Love First Republic Bank (NYSE:FRC)?

Is First Republic Bank (NYSE:FRC) a buy right now? Hedge funds are betting on the stock. The number of bullish hedge fund positions advanced by 4 lately.

In the 21st century investor’s toolkit, there are a multitude of metrics market participants can use to analyze stocks. A duo of the most underrated are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite fund managers can outperform the S&P 500 by a significant margin (see just how much).

Just as key, positive insider trading sentiment is another way to break down the financial markets. There are plenty of reasons for a bullish insider to drop shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Several empirical studies have demonstrated the valuable potential of this strategy if piggybackers know what to do (learn more here).

Now, we’re going to take a peek at the recent action encompassing First Republic Bank (NYSE:FRC).

How are hedge funds trading First Republic Bank (NYSE:FRC)?

Heading into 2013, a total of 22 of the hedge funds we track were long in this stock, a change of 22% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their holdings significantly.

When looking at the hedgies we track, Select Equity Group, managed by Robert Joseph Caruso, holds the most valuable position in First Republic Bank (NYSE:FRC). Select Equity Group has a $105 million position in the stock, comprising 1.6% of its 13F portfolio. Coming in second is John Osterweis of Osterweis Capital Management, with a $58 million position; the fund has 2.6% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Ken Griffin’s Citadel Investment Group, David Stemerman’s Conatus Capital Management and D. E. Shaw’s D E Shaw.

Consequently, some big names were breaking ground themselves. Carlson Capital, managed by Clint Carlson, assembled the largest position in First Republic Bank (NYSE:FRC). Carlson Capital had 8 million invested in the company at the end of the quarter. Daniel S. Och’s OZ Management also made a $2 million investment in the stock during the quarter. The following funds were also among the new FRC investors: Ken Gray and Steve Walsh’s Bryn Mawr Capital, Cliff Asness’s AQR Capital Management, and Paul Tudor Jones’s Tudor Investment Corp.

What have insiders been doing with First Republic Bank (NYSE:FRC)?

Bullish insider trading is best served when the company in focus has seen transactions within the past 180 days. Over the latest half-year time frame, First Republic Bank (NYSE:FRC) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

With the results shown by our research, retail investors must always keep an eye on hedge fund and insider trading activity, and First Republic Bank (NYSE:FRC) applies perfectly to this mantra.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.

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