How do you pick the next stock to invest in? One way would be to spend hours of research browsing through thousands of publicly-traded companies. However, an easier way is to look at the stocks that smart money investors are collectively bullish on. Hedge funds and other institutional investors usually invest large amounts of capital and have to conduct due diligence while choosing their next pick. They don’t always get it right, but, on average, their stock picks historically generated strong returns after adjusting for known risk factors. With this in mind, let’s take a look at the recent hedge fund activity surrounding WSFS Financial Corporation (NASDAQ:WSFS).
Is WSFS Financial Corporation (NASDAQ:WSFS) the right investment to pursue these days? Prominent investors are getting less optimistic. The number of long hedge fund bets dropped by one in the third quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Amplify Snack Brands Inc (NYSE:BETR), Pampa Energia S.A. (ADR) (NYSE:PAM), and Altisource Residential Corp (NYSE:RESI) to gather more data points.
In today’s marketplace there are tons of tools shareholders employ to size up their holdings. A couple of the less known tools are hedge fund and insider trading moves. our experts have shown that, historically, those who follow the best picks of the best hedge fund managers can outpace their index-focused peers by a healthy amount (see the details here).
Keeping this in mind, we’re going to take a look at the latest action encompassing WSFS Financial Corporation (NASDAQ:WSFS).
How have hedgies been trading WSFS Financial Corporation (NASDAQ:WSFS)?
At the end of the third quarter, a total of nine of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 10% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Renaissance Technologies, managed by Jim Simons, holds the biggest position in WSFS Financial Corporation (NASDAQ:WSFS). Renaissance Technologies has a $26.4 million position in the stock, comprising 0.1% of its 13F portfolio. The second-largest stake is held by Pzena Investment Management, led by Richard S. Pzena, holding a $17.1 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedge funds that hold long positions comprise Paul Hondros’ AlphaOne Capital Partners, Peter Muller’s PDT Partners, and Gregg J. Powers’ Private Capital Management.
Because WSFS Financial Corporation (NASDAQ:WSFS) has witnessed declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there was a specific group of hedge funds that slashed their full holdings last quarter. Interestingly, Ken Gray and Steve Walsh’s Bryn Mawr Capital sold off the biggest position of the “upper crust” of funds monitored by Insider Monkey, worth close to $5.1 million in stock. Ken Griffin’s fund, Citadel Investment Group, also dumped its stock, about $0.3 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by one fund last quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as WSFS Financial Corporation (NASDAQ:WSFS) but similarly valued. These stocks are Amplify Snack Brands Inc (NYSE:BETR), Pampa Energia S.A. (ADR) (NYSE:PAM), Altisource Residential Corp (NYSE:RESI), and Standard Motor Products, Inc. (NYSE:SMP). All of these stocks’ market caps match WSFS Financial Corporation (NASDAQ:WSFS)’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $108 million. That figure was $52 millions in WSFS Financial Corporation (NASDAQ:WSFS)’s case. Amplify Snack Brands Inc (NYSE:BETR) is the most popular stock in this table. On the other hand, Standard Motor Products, Inc. (NYSE:SMP) is the least popular one with only six bullish hedge fund positions. WSFS Financial Corporation (NASDAQ:WSFS) is not the least popular stock in this group but hedge fund interest is still below average compared to these stocks. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard Altisource Residential Corp (NYSE:RESI) might be a better candidate to consider a long position in.