Has F.N.B. Corp (FNB) Become A Good Stock To Buy?

The successful funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at F.N.B. Corp (NYSE:FNB) from the perspective of those successful funds.

Is F.N.B. Corp (NYSE:FNB) worth your attention right now? Prominent investors are becoming hopeful. The number of bullish hedge fund bets that are revealed through the 13F filings swelled by 2 lately. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Hudson Pacific Properties Inc (NYSE:HPP), PIMCO Dynamic Credit Income Fund (NYSE:PCI), and Rackspace Hosting, Inc. (NYSE:RAX) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

How have hedgies been trading F.N.B. Corp (NYSE:FNB)?

At the end of the third quarter, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 17% gain from the second quarter of 2016. The graph below displays the number of hedge funds with bullish position in FNB over the last 5 quarters, which has remained in a very narrow range. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Israel Englander’s Millennium Management has the most valuable position in F.N.B. Corp (NYSE:FNB), worth close to $89.2 million. On Millennium Management’s heels is Citadel Investment Group, led by Ken Griffin, holding a $28.7 million position. Some other professional money managers that are bullish include Dmitry Balyasny’s Balyasny Asset Management, John Overdeck and David Siegel’s Two Sigma Advisors, and Ian Cumming and Joseph Steinberg’s Leucadia National. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Now, some big names have jumped into F.N.B. Corp (NYSE:FNB) headfirst. Balyasny Asset Management initiated the largest position in F.N.B. Corp (NYSE:FNB). Balyasny Asset Management had $17.1 million invested in the company at the end of the quarter. Ian Cumming and Joseph Steinberg’s Leucadia National also made a $6.5 million investment in the stock during the quarter. The other funds with brand new FNB positions are Solomon Kumin’s Folger Hill Asset Management, Eric Halet and Davide Serra’s Algebris Investments, and Paul Tudor Jones’ Tudor Investment Corp.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as F.N.B. Corp (NYSE:FNB) but similarly valued. These stocks are Hudson Pacific Properties Inc (NYSE:HPP), PIMCO Dynamic Credit Income Fund (NYSE:PCI), Rackspace Hosting, Inc. (NYSE:RAX), and Proofpoint Inc (NASDAQ:PFPT). All of these stocks’ market caps match FNB’s market cap.

As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $315 million. That figure was $169 million in FNB’s case. Rackspace Hosting, Inc. (NYSE:RAX) is the most popular stock in this table. On the other hand PIMCO Dynamic Credit Income Fund (NYSE:PCI) is the least popular one with only 3 bullish hedge fund positions. F.N.B. Corp (NYSE:FNB) 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 RAX might be a better candidate to consider taking a long position in.

Disclosure: None