Now, according to many market players, hedge funds are assumed to be delayed, outdated financial vehicles of a period lost to current times. Although there are more than 8,000 hedge funds with their doors open today, Insider Monkey focuses on the aristocrats of this club, about 525 funds. Analysts calculate that this group controls most of all hedge funds' total assets, and by monitoring their highest performing picks, we've spotted a number of investment strategies that have historically beaten the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually 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 outperformed the S&P 500 index by 33 percentage points in 11 months (find the details here).
Just as crucial, bullish insider trading sentiment is a second way to look at the marketplace. Just as you'd expect, there are a number of stimuli for an insider to drop shares of his or her company, but just one, very clear reason why they would initiate a purchase. Many empirical studies have demonstrated the market-beating potential of this tactic if piggybackers know where to look (learn more here).
Now that that's out of the way, it's important to examine the recent info surrounding Synovus Financial Corp. (NYSE:SNV).
In preparation for the third quarter, a total of 27 of the hedge funds we track were bullish in this stock, a change of 0% from the first quarter. With hedgies' sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their holdings substantially.
Out of the hedge funds we follow, Anchorage Advisors, managed by Kevin Michael Ulrich, holds the most valuable position in Synovus Financial Corp. (NYSE:SNV). Anchorage Advisors has a $95.8 million position in the stock, comprising 5.8% of its 13F portfolio. Sitting at the No. 2 spot is Ken Griffin of Citadel Investment Group, with a $42.6 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedge funds that are bullish include Matthew Lindenbaum's Basswood Capital, Bruce Kovner's Caxton Associates LP and Tom Brown's Second Curve Capital.
Because Synovus Financial Corp. (NYSE:SNV) has faced bearish sentiment from the smart money's best and brightest, logic holds that there is a sect of hedgies who sold off their positions entirely in Q1. It's worth mentioning that D. E. Shaw's D E Shaw said goodbye to the biggest position of all the hedgies we watch, worth about $37.6 million in stock, and Glenn Russell Dubin of Highbridge Capital Management was right behind this move, as the fund said goodbye to about $20.1 million worth. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Legal insider trading, particularly when it's bullish, is particularly usable when the company we're looking at has seen transactions within the past six months. Over the latest 180-day time frame, Synovus Financial Corp. (NYSE:SNV) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We'll check out the relationship between both of these indicators in other stocks similar to Synovus Financial Corp. (NYSE:SNV). These stocks are WesBanco, Inc. (NASDAQ:WSBC), SCBT Financial Corporation (NASDAQ:SCBT), United Bankshares, Inc. (NASDAQ:UBSI), First Citizens BancShares Inc. (NASDAQ:FCNCA), and BankUnited (NYSE:BKU). This group of stocks are the members of the regional - mid-atlantic banks industry and their market caps match SNV's market cap.