Is State Bank Financial Corp (NASDAQ:STBZ) a bargain? The best stock pickers are becoming hopeful. The number of long hedge fund bets advanced by 1 lately.
To most shareholders, hedge funds are assumed to be slow, old financial vehicles of yesteryear. While there are over 8000 funds trading at the moment, we at Insider Monkey look at the leaders of this club, around 450 funds. It is estimated that this group oversees the lion's share of the hedge fund industry's total asset base, and by keeping an eye on their highest performing picks, we have formulated a number of investment strategies that have historically outperformed 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 began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Just as key, positive insider trading sentiment is another way to parse down the stock market universe. Just as you'd expect, there are many incentives for a bullish insider to drop shares of his or her company, but only one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the market-beating potential of this method if "monkeys" understand where to look (learn more here).
With these "truths" under our belt, let's take a gander at the recent action surrounding State Bank Financial Corp (NASDAQ:STBZ).
At Q1's end, a total of 8 of the hedge funds we track were bullish in this stock, a change of 14% from the previous quarter. With hedgies' sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings considerably.
Of the funds we track, Greenlight Capital, managed by David Einhorn, holds the most valuable position in State Bank Financial Corp (NASDAQ:STBZ). Greenlight Capital has a $34.4 million position in the stock, comprising 0.5% of its 13F portfolio. Coming in second is Paulson & Co, managed by John Paulson, which held a $20.7 million position; 0.1% of its 13F portfolio is allocated to the company. Some other peers that are bullish include Robert Pohly's Samlyn Capital, Chuck Royce's Royce & Associates and Gregg J. Powers's Private Capital Management.
With a general bullishness amongst the heavyweights, some big names were leading the bulls' herd. Private Capital Management, managed by Gregg J. Powers, created the most outsized position in State Bank Financial Corp (NASDAQ:STBZ). Private Capital Management had 5.1 million invested in the company at the end of the quarter.
Insider purchases made by high-level executives is most useful when the company we're looking at has experienced transactions within the past half-year. Over the last half-year time period, State Bank Financial Corp (NASDAQ:STBZ) has experienced 1 unique insiders purchasing, and zero insider sales (see the details of insider trades here).
With the returns demonstrated by Insider Monkey's research, everyday investors must always watch hedge fund and insider trading activity, and State Bank Financial Corp (NASDAQ:STBZ) is an important part of this process.