Hudson City Bancorp, Inc. (NASDAQ:HCBK) was in 24 hedge funds' portfolio at the end of the first quarter of 2013. HCBK has experienced a decrease in hedge fund interest in recent months. There were 25 hedge funds in our database with HCBK positions at the end of the previous quarter.
If you'd ask most investors, hedge funds are assumed to be slow, outdated financial tools of years past. While there are greater than 8000 funds with their doors open today, we look at the elite of this club, around 450 funds. Most estimates calculate that this group oversees the majority of the hedge fund industry's total capital, and by keeping an eye on their best investments, we have figured out a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually 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 topped the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Just as important, optimistic insider trading sentiment is a second way to break down the investments you're interested in. As the old adage goes: there are lots of stimuli for an upper level exec to get rid of shares of his or her company, but just one, very clear reason why they would initiate a purchase. Plenty of academic studies have demonstrated the market-beating potential of this strategy if shareholders know what to do (learn more here).
With all of this in mind, let's take a peek at the key action encompassing Hudson City Bancorp, Inc. (NASDAQ:HCBK).
Heading into Q2, a total of 24 of the hedge funds we track held long positions in this stock, a change of -4% from the previous quarter. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their stakes meaningfully.
Of the funds we track, Harvard Management Co, managed by Jane Mendillo, holds the biggest position in Hudson City Bancorp, Inc. (NASDAQ:HCBK). Harvard Management Co has a $137.2 million position in the stock, comprising 12.3% of its 13F portfolio. Sitting at the No. 2 spot is Robert Emil Zoellner of Alpine Associates, with a $132.3 million position; 5.1% of its 13F portfolio is allocated to the stock. Remaining peers that are bullish include Cliff Asness's AQR Capital Management, Sander Gerber's Hudson Bay Capital Management and Phill Gross and Robert Atchinson's Adage Capital Management.
Seeing as Hudson City Bancorp, Inc. (NASDAQ:HCBK) has experienced declining sentiment from the smart money, we can see that there were a few hedgies who sold off their entire stakes heading into Q2. It's worth mentioning that Nick Niell's Arrowgrass Capital Partners dropped the largest investment of the 450+ funds we monitor, totaling an estimated $45.7 million in stock.. John Thiessen's fund, Vertex One Asset Management, also sold off its stock, about $6 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 1 funds heading into Q2.
Bullish insider trading is best served when the company in focus has experienced transactions within the past six months. Over the latest half-year time period, Hudson City Bancorp, Inc. (NASDAQ:HCBK) has seen zero unique insiders buying, and 2 insider sales (see the details of insider trades here).
Let's also take a look at hedge fund and insider activity in other stocks similar to Hudson City Bancorp, Inc. (NASDAQ:HCBK). These stocks are Investors Bancorp, Inc. (NASDAQ:ISBC), First Niagara Financial Group Inc. (NASDAQ:FNFG), New York Community Bancorp, Inc. (NYSE:NYCB), Ocwen Financial Corporation (NYSE:OCN), and People's United Financial, Inc. (NASDAQ:PBCT). This group of stocks are in the savings & loans industry and their market caps are similar to HCBK's market cap.