East West Bancorp, Inc. (NASDAQ:EWBC) was in 13 hedge funds’ portfolio at the end of March. EWBC has seen a decrease in hedge fund interest of late. There were 16 hedge funds in our database with EWBC positions at the end of the previous quarter.
In the eyes of most market participants, hedge funds are perceived as underperforming, old investment vehicles of yesteryear. While there are more than 8000 funds with their doors open at the moment, we choose to focus on the upper echelon of this group, about 450 funds. It is widely believed that this group has its hands on the majority of the hedge fund industry’s total capital, and by watching their highest performing equity investments, we have brought to light a few investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outperformed 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Equally as beneficial, bullish insider trading sentiment is another way to parse down the stock market universe. Obviously, there are many motivations for a corporate insider to cut shares of his or her company, but only one, very clear reason why they would behave bullishly. Plenty of empirical studies have demonstrated the impressive potential of this strategy if shareholders understand what to do (learn more here).
Consequently, it’s important to take a look at the recent action surrounding East West Bancorp, Inc. (NASDAQ:EWBC).
How are hedge funds trading East West Bancorp, Inc. (NASDAQ:EWBC)?
At Q1’s end, a total of 13 of the hedge funds we track were long in this stock, a change of -19% from one quarter earlier. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their holdings meaningfully.
When looking at the hedgies we track, Ken Fisher’s Fisher Asset Management had the largest position in East West Bancorp, Inc. (NASDAQ:EWBC), worth close to $86.9 million, comprising 0.2% of its total 13F portfolio. The second largest stake is held by Citadel Investment Group, managed by Ken Griffin, which held a $82.7 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining peers that are bullish include David Dreman’s Dreman Value Management, Ken Gray and Steve Walsh’s Bryn Mawr Capital and Glenn Russell Dubin’s Highbridge Capital Management.
Due to the fact that East West Bancorp, Inc. (NASDAQ:EWBC) has faced bearish sentiment from the smart money, it’s easy to see that there is a sect of hedge funds that decided to sell off their positions entirely heading into Q2. Interestingly, John Overdeck and David Siegel’s Two Sigma Advisors dumped the biggest investment of all the hedgies we key on, totaling close to $3.2 million in stock.. Louis Bacon’s fund, Moore Global Investments, also sold off its stock, about $2.1 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 3 funds heading into Q2.
What have insiders been doing with East West Bancorp, Inc. (NASDAQ:EWBC)?
Bullish insider trading is particularly usable when the primary stock in question has seen transactions within the past half-year. Over the latest 180-day time frame, East West Bancorp, Inc. (NASDAQ:EWBC) has seen zero unique insiders buying, and 2 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to East West Bancorp, Inc. (NASDAQ:EWBC). These stocks are Cathay General Bancorp (NASDAQ:CATY), Bank of Hawaii Corporation (NYSE:BOH), Zions Bancorporation (NASDAQ:ZION), City National Corp (NYSE:CYN), and SVB Financial Group (NASDAQ:SIVB). This group of stocks belong to the regional – pacific banks industry and their market caps are similar to EWBC’s market cap.