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Do Hedge Funds and Insiders Love Prosperity Bancshares, Inc. (PB)?

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Is Prosperity Bancshares, Inc. (NYSE:PB) a good investment?

In the eyes of many of your fellow readers, hedge funds are viewed as overrated, old financial tools of an era lost to time. Although there are more than 8,000 hedge funds trading currently, this site looks at the crème de la crème of this group, close to 525 funds. Analysts calculate 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 performing investments, we’ve deciphered a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum 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 (explore the details and some picks here).

Equally as key, bullish insider trading activity is another way to look at the investments you’re interested in. As the old adage goes: there are a variety of reasons for a corporate insider to downsize shares of his or her company, but only one, very clear reason why they would behave bullishly. Several academic studies have demonstrated the useful potential of this strategy if investors understand where to look (learn more here).

Keeping this in mind, we’re going to examine the latest info about Prosperity Bancshares, Inc. (NYSE:PB).

What does the smart money think about Prosperity Bancshares, Inc. (NYSE:PB)?

In preparation for the third quarter, a total of 10 of the hedge funds we track held long positions in this stock, a change of 43% from the first quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their stakes significantly.

Prosperity Bancshares, Inc. (NYSE:PB)When using filings from the hedgies we track, Ken Fisher’s Fisher Asset Management had the biggest position in Prosperity Bancshares, Inc. (NYSE:PB), worth close to $30.6 million, comprising 0.1% of its total 13F portfolio. Coming in second is David Dreman of Dreman Value Management, with a $21.3 million position; 0.7% of its 13F portfolio is allocated to the stock. Other peers that hold long positions include Ken Gray and Steve Walsh’s Bryn Mawr Capital, Ken Griffin’s Citadel Investment Group and Cliff Asness’s AQR Capital Management.

As industrywide interest increased, certain money managers have been driving this bullishness. Fisher Asset Management, managed by Ken Fisher, created the most valuable position in Prosperity Bancshares, Inc. (NYSE:PB). Fisher Asset Management had 30.6 million invested in the company at the end of the quarter. David Dreman’s Dreman Value Management also initiated a $21.3 million position during the quarter. The following funds were also among the new PB investors: Ken Gray and Steve Walsh’s Bryn Mawr Capital, Ken Griffin’s Citadel Investment Group, and Cliff Asness’s AQR Capital Management.

What have insiders been doing with Prosperity Bancshares, Inc. (NYSE:PB)?

Insider buying is particularly usable when the company in focus has seen transactions within the past 180 days. Over the latest half-year time frame, Prosperity Bancshares, Inc. (NYSE:PB) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to Prosperity Bancshares, Inc. (NYSE:PB). These stocks are Texas Capital Bancshares Inc (NASDAQ:TCBI), BOK Financial Corporation (NASDAQ:BOKF), Cullen/Frost Bankers, Inc. (NYSE:CFR), Commerce Bancshares, Inc. (NASDAQ:CBSH), and UMB Financial Corporation (NASDAQ:UMBF). This group of stocks are in the regional – southwest banks industry and their market caps are closest to PB’s market cap.

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