Should You Buy City National Corp (CYN)?

Due to the fact that City National Corp (NYSE:CYN) has faced falling interest from the aggregate hedge fund industry, we can see that there is a sect of hedge funds that slashed their positions entirely last quarter. Interestingly, Millennium Management Subsidiary’s Green Arrow Capital Management sold off the largest investment of all the hedgies monitored by Insider Monkey, comprising an estimated $13.6 million in stock, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners was right behind this move, as the fund sold off about $4.6 million worth of CYN shares. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as City National Corp (NYSE:CYN) but similarly valued. These stocks are Starwood Property Trust, Inc. (NYSE:STWD), Southwestern Energy Company (NYSE:SWN), Pinnacle Foods Inc (NYSE:PF), and Chesapeake Energy Corporation (NYSE:CHK). This group of stocks’ market values match CYN’s market value.

As you can see these stocks had an average of 34 hedge funds with bullish positions and the average amount invested in these stocks was $851 million. That figure was just $406 million in CYN’s case. Southwestern Energy Company (NYSE:SWN) is the most popular stock in this table. On the other hand Starwood Property Trust, Inc. (NYSE:STWD) is the least popular one with only 26 bullish hedge fund positions. Compared to these stocks City National Corp (NYSE:CYN) is even less popular than STWD. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.