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Hedge Funds Are Betting On Commerce Bancshares, Inc. (CBSH)

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Should Commerce Bancshares, Inc. (NASDAQ:CBSH) investors track the following data?

If you were to ask many of your fellow readers, hedge funds are viewed as delayed, outdated investment tools of an era lost to time. Although there are In excess of 8,000 hedge funds in operation currently, this site aim at the upper echelon of this group, close to 525 funds. It is widely held that this group oversees the majority of the smart money’s total capital, and by keeping an eye on their best stock picks, we’ve revealed a few investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outpaced 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 trumped the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).

Just as necessary, optimistic insider trading activity is another way to look at the stock market universe. Just as you’d expect, there are plenty of incentives for a corporate insider to downsize shares of his or her company, but just one, very simple reason why they would initiate a purchase. Plenty of academic studies have demonstrated the useful potential of this method if “monkeys” know where to look (learn more here).

Now that that’s out of the way, it’s important to examine the latest info about Commerce Bancshares, Inc. (NASDAQ:CBSH).

Hedge fund activity in Commerce Bancshares, Inc. (NASDAQ:CBSH)

At the end of the second quarter, a total of 12 of the hedge funds we track were long in this stock, a change of 71% from one quarter earlier. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings significantly.

Commerce Bancshares, Inc. (NASDAQ:CBSH)Out of the hedge funds we follow, Third Avenue Management, managed by Martin Whitman, holds the most valuable position in Commerce Bancshares, Inc. (NASDAQ:CBSH). Third Avenue Management has a $22.9 million position in the stock, comprising 0.4% of its 13F portfolio. Sitting at the No. 2 spot is Citadel Investment Group, managed by Ken Griffin, which held a $12 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other peers that are bullish include Ken Gray and Steve Walsh’s Bryn Mawr Capital, Cliff Asness’s AQR Capital Management and Israel Englander’s Millennium Management.

As aggregate interest spiked, certain money managers were breaking ground themselves. Third Avenue Management, managed by Martin Whitman, initiated the biggest position in Commerce Bancshares, Inc. (NASDAQ:CBSH). Third Avenue Management had 22.9 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $12 million investment in the stock during the quarter. The following funds were also among the new CBSH investors: Ken Gray and Steve Walsh’s Bryn Mawr Capital, Cliff Asness’s AQR Capital Management, and Israel Englander’s Millennium Management.

How are insiders trading Commerce Bancshares, Inc. (NASDAQ:CBSH)?

Insider buying made by high-level executives is most useful when the company we’re looking at has experienced transactions within the past 180 days. Over the last half-year time period, Commerce Bancshares, Inc. (NASDAQ:CBSH) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

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

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