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Should You Avoid Regions Financial Corporation (NYSE:RF)?

Regions Financial Corporation (NYSE:RF) was in 39 hedge funds’ portfolio at the end of the fourth quarter of 2012. RF investors should pay attention to a decrease in support from the world’s most elite money managers lately. There were 40 hedge funds in our database with RF holdings at the end of the previous quarter.

Regions Financial Corporation NYSE:RF

At the moment, there are a multitude of metrics market participants can use to monitor the equity markets. Some of the most useful are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top investment managers can beat the S&P 500 by a superb margin (see just how much).

Just as beneficial, bullish insider trading sentiment is another way to break down the marketplace. As the old adage goes: there are many stimuli for a corporate insider to get rid of shares of his or her company, but only one, very simple reason why they would initiate a purchase. Many empirical studies have demonstrated the valuable potential of this tactic if piggybackers know where to look (learn more here).

Consequently, let’s take a glance at the recent action encompassing Regions Financial Corporation (NYSE:RF).

How are hedge funds trading Regions Financial Corporation (NYSE:RF)?

Heading into 2013, a total of 39 of the hedge funds we track held long positions in this stock, a change of -3% from one quarter earlier. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings considerably.

When looking at the hedgies we track, Ken Griffin’s Citadel Investment Group had the largest position in Regions Financial Corporation (NYSE:RF), worth close to $192 million billion, comprising 0.3% of its total 13F portfolio. On Citadel Investment Group’s heels is Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $145 million position; 1.1% of its 13F portfolio is allocated to the company. Remaining hedge funds with similar optimism include Phill Gross and Robert Atchinson’s Adage Capital Management, Clint Carlson’s Carlson Capital and David Gallo’s Valinor Management LLC.

Since Regions Financial Corporation (NYSE:RF) has experienced bearish sentiment from the smart money, we can see that there exists a select few hedgies that decided to sell off their positions entirely last quarter. Interestingly, James Dinan’s York Capital Management cut the biggest position of the 450+ funds we key on, comprising an estimated $97 million in stock., and Jim Simons of Renaissance Technologies was right behind this move, as the fund dumped about $54 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 1 funds last quarter.

How are insiders trading Regions Financial Corporation (NYSE:RF)?

Insider trading activity, especially when it’s bullish, is particularly usable when the company in focus has experienced transactions within the past half-year. Over the latest 180-day time frame, Regions Financial Corporation (NYSE:RF) has seen 2 unique insiders buying, and 3 insider sales (see the details of insider trades here).

With the returns demonstrated by the aforementioned tactics, retail investors must always keep an eye on hedge fund and insider trading sentiment, and Regions Financial Corporation (NYSE:RF) shareholders fit into this picture quite nicely.

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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.

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