According to most shareholders, hedge funds are perceived as worthless, old investment vehicles of years past. While there are over 8000 funds trading at the moment, we hone in on the crème de la crème of this group, close to 450 funds. Most estimates calculate that this group oversees most of the smart money’s total capital, and by monitoring their top investments, we have determined a few investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year 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 trumped the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Equally as key, positive insider trading sentiment is a second way to break down the financial markets. There are many incentives for an insider to sell shares of his or her company, but just one, very obvious reason why they would behave bullishly. Many empirical studies have demonstrated the impressive potential of this strategy if shareholders understand what to do (learn more here).
With all of this in mind, we’re going to take a look at the recent action regarding Umpqua Holdings Corp (NASDAQ:UMPQ).
What have hedge funds been doing with Umpqua Holdings Corp (NASDAQ:UMPQ)?
In preparation for this quarter, a total of 7 of the hedge funds we track were long in this stock, a change of -46% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their stakes significantly.
When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the most valuable position in Umpqua Holdings Corp (NASDAQ:UMPQ). Royce & Associates has a $25.5 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is AQR Capital Management, managed by Cliff Asness, which held a $5.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include David Dreman’s Dreman Value Management, Ken Griffin’s Citadel Investment Group and Jim Simons’s Renaissance Technologies.
Due to the fact that Umpqua Holdings Corp (NASDAQ:UMPQ) has experienced a declination in interest from the smart money, it’s easy to see that there lies a certain “tier” of hedgies that decided to sell off their full holdings heading into Q2. At the top of the heap, Israel Englander’s Millennium Management dropped the largest investment of all the hedgies we monitor, comprising an estimated $2.1 million in stock.. Mike Vranos’s fund, Ellington, also dropped its stock, about $0.4 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 6 funds heading into Q2.
What have insiders been doing with Umpqua Holdings Corp (NASDAQ:UMPQ)?
Insider purchases made by high-level executives is most useful when the primary stock in question has seen transactions within the past six months. Over the latest 180-day time period, Umpqua Holdings Corp (NASDAQ:UMPQ) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Umpqua Holdings Corp (NASDAQ:UMPQ). These stocks are CVB Financial Corp. (NASDAQ:CVBF), Western Alliance Bancorporation (NYSE:WAL), WestAmerica Bancorp. (NASDAQ:WABC), Glacier Bancorp, Inc. (NASDAQ:GBCI), and Cathay General Bancorp (NASDAQ:CATY). This group of stocks are in the regional – pacific banks industry and their market caps resemble UMPQ’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| CVB Financial Corp. (NASDAQ:CVBF) | 8 | 0 | 5 |
| Western Alliance Bancorporation (NYSE:WAL) | 11 | 2 | 8 |
| WestAmerica Bancorp. (NASDAQ:WABC) | 8 | 0 | 4 |
| Glacier Bancorp, Inc. (NASDAQ:GBCI) | 11 | 0 | 0 |
| Cathay General Bancorp (NASDAQ:CATY) | 8 | 1 | 6 |
With the results exhibited by our tactics, everyday investors should always keep an eye on hedge fund and insider trading activity, and Umpqua Holdings Corp (NASDAQ:UMPQ) is no exception.
