Here is What Hedge Funds Think About Capital Bank Financial Corp (CBF)

With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was Capital Bank Financial Corp (NASDAQ:CBF).

Capital Bank Financial Corp was in 5 hedge funds’ portfolios at the end of September. CBF has experienced a decrease in hedge fund interest recently. There were 8 hedge funds in our database with CBF positions at the end of the previous quarter. At the end of this article we will also compare CBF to other stocks, including Headwaters Inc (NYSE:HW), ClubCorp Holdings Inc (NYSE:MYCC), and Park National Corporation (NYSEAMEX:PRK) to get a better sense of its popularity.

In the eyes of most traders, hedge funds are seen as unimportant, old financial vehicles of the past. While there are greater than 8000 funds with their doors open at the moment, Our experts hone in on the upper echelon of this group, about 700 funds. These hedge fund managers administer most of all hedge funds’ total asset base, and by shadowing their finest picks, Insider Monkey has come up with many investment strategies that have historically surpassed the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy outperformed the S&P 500 index by 12 percentage points per annum for a decade in their back tests.

With all of this in mind, let’s take a look at the latest action surrounding Capital Bank Financial Corp (NASDAQ:CBF).

What have hedge funds been doing with Capital Bank Financial Corp (NASDAQ:CBF)?

At the Q3’s end, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -38% from one quarter earlier. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Cliff Asness’ AQR Capital Management has the number one position in Capital Bank Financial Corp (NASDAQ:CBF), worth close to $9.7 million, amounting to less than 0.1%% of its total 13F portfolio. The second largest stake is held by Chuck Royce of Royce & Associates, with a $8.6 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that are bullish contain Jim Simons’ Renaissance Technologies, John Overdeck and David Siegel’s Two Sigma Advisors and Peter Muller’s PDT Partners.

Due to the fact that Capital Bank Financial Corp (NASDAQ:CBF) has faced declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there were a few hedgies that slashed their entire stakes heading into Q4. At the top of the heap, Clint Carlson’s Carlson Capital cut the biggest stake of the “upper crust” of funds monitored by Insider Monkey, totaling an estimated $6.3 million in stock, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund sold off about $1.5 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 3 funds heading into Q4.

Let’s now review hedge fund activity in other stocks similar to Capital Bank Financial Corp (NASDAQ:CBF). We will take a look at Headwaters Inc (NYSE:HW), ClubCorp Holdings Inc (NYSE:MYCC), Park National Corporation (NYSEAMEX:PRK), and Builders FirstSource, Inc. (NASDAQ:BLDR). This group of stocks’ market caps resemble CBF’s market cap.

As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $162 million, compared to just $23 million in CBF’s case. Builders FirstSource, Inc. (NASDAQ:BLDR) is the most popular stock in this table. On the other hand Park National Corporation (NYSEAMEX:PRK) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Capital Bank Financial Corp (NASDAQ:CBF) is even less popular than PRK. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.