SVB Financial Group (NASDAQ:SIVB) shareholders have witnessed a decrease in activity from the world’s largest hedge funds of late.
To most traders, hedge funds are seen as unimportant, outdated investment vehicles of the past. While there are over 8000 funds trading at present, we at Insider Monkey look at the leaders of this club, about 450 funds. It is estimated that this group oversees the majority of the smart money’s total capital, and by watching their top investments, we have found a few investment strategies that have historically beaten the market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).
Equally as integral, positive insider trading activity is a second way to parse down the stock market universe. Obviously, there are a number of incentives for an upper level exec to sell shares of his or her company, but just one, very clear reason why they would initiate a purchase. Various academic studies have demonstrated the market-beating potential of this method if piggybackers understand what to do (learn more here).
With all of this in mind, we’re going to take a gander at the key action encompassing SVB Financial Group (NASDAQ:SIVB).
How are hedge funds trading SVB Financial Group (NASDAQ:SIVB)?
In preparation for this year, a total of 15 of the hedge funds we track held long positions in this stock, a change of 0% from the third quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their holdings substantially.
Of the funds we track, Fisher Asset Management, managed by Ken Fisher, holds the biggest position in SVB Financial Group (NASDAQ:SIVB). Fisher Asset Management has a $82 million position in the stock, comprising 0.2% of its 13F portfolio. The second largest stake is held by Ken Griffin of Citadel Investment Group, with a $18 million position; the fund has 0% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Jeffrey Vinik’s Vinik Asset Management, Jim Simons’s Renaissance Technologies and Neil Chriss’s Hutchin Hill Capital.
Due to the fact that SVB Financial Group (NASDAQ:SIVB) has experienced declining sentiment from the smart money, it’s safe to say that there is a sect of money managers who sold off their full holdings at the end of the year. Interestingly, Bruce Kovner’s Caxton Associates LP dumped the largest stake of the “upper crust” of funds we monitor, comprising about $3 million in stock.. Israel Englander’s fund, Catapult Capital Management, also dumped its stock, about $1 million worth. These transactions are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
What do corporate executives and insiders think about SVB Financial Group (NASDAQ:SIVB)?
Insider purchases made by high-level executives is particularly usable when the company in focus has experienced transactions within the past 180 days. Over the last half-year time frame, SVB Financial Group (NASDAQ:SIVB) has seen zero unique insiders buying, and 11 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to SVB Financial Group (NASDAQ:SIVB). These stocks are Cathay General Bancorp (NASDAQ:CATY), Zions Bancorporation (NASDAQ:ZION), Bank of Hawaii Corporation (NYSE:BOH), East West Bancorp, Inc. (NASDAQ:EWBC), and City National Corp (NYSE:CYN). All of these stocks are in the regional – pacific banks industry and their market caps are closest to SIVB’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Cathay General Bancorp (NASDAQ:CATY)||7||1||5|
|Zions Bancorporation (NASDAQ:ZION)||21||3||5|
|Bank of Hawaii Corporation (NYSE:BOH)||6||0||5|
|East West Bancorp, Inc. (NASDAQ:EWBC)||16||0||2|
|City National Corp (NYSE:CYN)||14||0||3|
With the returns shown by Insider Monkey’s strategies, retail investors must always watch hedge fund and insider trading activity, and SVB Financial Group (NASDAQ:SIVB) shareholders fit into this picture quite nicely.
Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.