Now, according to many traders, hedge funds are assumed to be overrated, outdated financial tools of a forgotten age. Although there are more than 8,000 hedge funds in operation currently, Insider Monkey looks at the moguls of this group, about 525 funds. Analysts calculate that this group oversees the majority of the hedge fund industry's total assets, and by watching their best investments, we've determined a number of investment strategies that have historically beaten the S&P 500. Our small-cap hedge fund strategy beat 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 outpaced the S&P 500 index by 33 percentage points in 11 months (find the details here).
Equally as key, optimistic insider trading sentiment is a second way to look at the marketplace. Just as you'd expect, there are lots of reasons for a corporate insider to downsize shares of his or her company, but just one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the valuable potential of this tactic if investors understand what to do (learn more here).
Thus, let's study the newest info about Astoria Financial Corp (NYSE:AF).
At the end of the second quarter, a total of 15 of the hedge funds we track were bullish in this stock, a change of 36% from the first quarter. With the smart money's capital changing hands, there exists a select group of key hedge fund managers who were boosting their holdings meaningfully.
According to our 13F database, Bernard Horn's Polaris Capital Management had the largest position in Astoria Financial Corp (NYSE:AF), worth close to $55.5 million, comprising 3.1% of its total 13F portfolio. On Polaris Capital Management's heels is Ken Griffin of Citadel Investment Group, with a $24.9 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other hedge funds with similar optimism include Matthew Lindenbaum's Basswood Capital, Jim Simons's Renaissance Technologies and Israel Englander's Millennium Management.
As one would understandably expect, specific money managers have been driving this bullishness. Polaris Capital Management, managed by Bernard Horn, established the biggest position in Astoria Financial Corp (NYSE:AF). Polaris Capital Management had 55.5 million invested in the company at the end of the quarter. Ken Griffin's Citadel Investment Group also initiated a $24.9 million position during the quarter. The other funds with new positions in the stock are Matthew Lindenbaum's Basswood Capital, Jim Simons's Renaissance Technologies, and Israel Englander's Millennium Management.
Insider buying is particularly usable when the company in focus has seen transactions within the past half-year. Over the latest half-year time frame, Astoria Financial Corp (NYSE:AF) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We'll also examine the relationship between both of these indicators in other stocks similar to Astoria Financial Corp (NYSE:AF). These stocks are Sterling Financial Corporation (NASDAQ:STSA), Flagstar Bancorp Inc (NYSE:FBC), Northwest Bancshares, Inc. (NASDAQ:NWBI), Columbia Banking System Inc (NASDAQ:COLB), and Provident Financial Services, Inc. (NYSE:PFS). All of these stocks are in the savings & loans industry and their market caps are closest to AF's market cap.