Huntington Bancshares Incorporated (NASDAQ:HBAN) investors should pay attention to an increase in hedge fund interest lately.
According to most stock holders, hedge funds are assumed to be unimportant, outdated investment vehicles of yesteryear. While there are more than 8000 funds in operation at present, we look at the aristocrats of this club, about 450 funds. It is widely believed that this group controls the lion's share of the smart money's total capital, and by watching their best equity investments, we have found a few investment strategies that have historically outpaced the broader indices. 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 outclassed the S&P 500 index by 25 percentage points in 6.5 month (see the details here).
Just as key, optimistic insider trading sentiment is another way to parse down the financial markets. Obviously, there are a variety of stimuli for an executive to sell shares of his or her company, but only one, very obvious reason why they would behave bullishly. Several academic studies have demonstrated the impressive potential of this tactic if "monkeys" understand where to look (learn more here).
Keeping this in mind, let's take a gander at the latest action regarding Huntington Bancshares Incorporated (NASDAQ:HBAN).
Heading into 2013, a total of 21 of the hedge funds we track were bullish in this stock, a change of 11% from the previous quarter. With hedgies' sentiment swirling, there exists an "upper tier" of key hedge fund managers who were boosting their holdings substantially.
When looking at the hedgies we track, Clint Carlson's Carlson Capital had the most valuable position in Huntington Bancshares Incorporated (NASDAQ:HBAN), worth close to $43 million, comprising 0.7% of its total 13F portfolio. Sitting at the No. 2 spot is Cliff Asness of AQR Capital Management, with a $26 million position; 0.7% of its 13F portfolio is allocated to the company. Other hedgies that are bullish include Abby Flamholz and Yehuda Blinder's ADAR Investment Management, James Dondero's Highland Capital Management and Ken Griffin's Citadel Investment Group.
As industrywide interest jumped, specific money managers were leading the bulls' herd. Carlson Capital, managed by Clint Carlson, initiated the most outsized position in Huntington Bancshares Incorporated (NASDAQ:HBAN). Carlson Capital had 43 million invested in the company at the end of the quarter. James Dondero's Highland Capital Management also made a $9 million investment in the stock during the quarter. The following funds were also among the new HBAN investors: Ken Gray and Steve Walsh's Bryn Mawr Capital, Glenn Russell Dubin's Highbridge Capital Management, and Charles Davidson's Wexford Capital.
Insider trading activity, especially when it's bullish, is at its handiest when the company in question has experienced transactions within the past half-year. Over the latest half-year time period, Huntington Bancshares Incorporated (NASDAQ:HBAN) has experienced 7 unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
With the results demonstrated by the aforementioned strategies, everyday investors should always watch hedge fund and insider trading sentiment, and Huntington Bancshares Incorporated (NASDAQ:HBAN) shareholders fit into this picture quite nicely.
Insider Monkey's small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.