Is Wilshire Bancorp Inc (NASDAQ:WIBC) undervalued? Investors who are in the know are becoming less confident. The number of bullish hedge fund positions stayed the same which is a slightly negative development in our experience
If you’d ask most market participants, hedge funds are viewed as slow, outdated financial tools of yesteryear. While there are greater than 8000 funds with their doors open today, we choose to focus on the leaders of this club, about 450 funds. It is widely believed that this group has its hands on most of all hedge funds’ total capital, and by monitoring their best equity investments, we have unearthed a number of investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year 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 25 percentage points in 6.5 month (see the details here).
Just as key, positive insider trading activity is another way to parse down the stock market universe. As the old adage goes: there are a number of stimuli for a corporate insider to downsize shares of his or her company, but just one, very obvious reason why they would buy. Several empirical studies have demonstrated the valuable potential of this method if investors understand where to look (learn more here).
Now, let’s take a gander at the key action surrounding Wilshire Bancorp Inc (NASDAQ:WIBC).
How have hedgies been trading Wilshire Bancorp Inc (NASDAQ:WIBC)?
Heading into 2013, a total of 11 of the hedge funds we track were long in this stock, a change of 0% from the previous quarter. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes meaningfully.
According to our comprehensive database, Jim Simons’s Renaissance Technologies had the largest position in Wilshire Bancorp Inc (NASDAQ:WIBC), worth close to $8 million, accounting for 0% of its total 13F portfolio. On Renaissance Technologies’s heels is Cliff Asness of AQR Capital Management, with a $4 million position; 0% of its 13F portfolio is allocated to the stock. Remaining hedgies with similar optimism include Bruce Kovner’s Caxton Associates LP, John Overdeck and David Siegel’s Two Sigma Advisors and Ken Griffin’s Citadel Investment Group.
Because Wilshire Bancorp Inc (NASDAQ:WIBC) has witnessed a declination in interest from the aggregate hedge fund industry, it’s easy to see that there was a specific group of hedge funds that decided to sell off their full holdings last quarter. It’s worth mentioning that D. E. Shaw’s D E Shaw dropped the largest investment of all the hedgies we track, valued at an estimated $0 million in stock., and Paul Tudor Jones of Tudor Investment Corp was right behind this move, as the fund said goodbye to about $0 million worth. These transactions are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
What have insiders been doing with Wilshire Bancorp Inc (NASDAQ:WIBC)?
Insider trading activity, especially when it’s bullish, is at its handiest when the company in question has experienced transactions within the past six months. Over the latest 180-day time period, Wilshire Bancorp Inc (NASDAQ:WIBC) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Wilshire Bancorp Inc (NASDAQ:WIBC). These stocks are 1st Source Corporation (NASDAQ:SRCE), First Financial Corp (NASDAQ:THFF), Lakeland Financial Corporation (NASDAQ:LKFN), First Merchants Corporation (NASDAQ:FRME), and Taylor Capital Group Inc (NASDAQ:TAYC). All of these stocks are in the regional – midwest banks industry and their market caps are similar to WIBC’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|1st Source Corporation (NASDAQ:SRCE)||2||1||5|
|First Financial Corp (NASDAQ:THFF)||3||2||2|
|Lakeland Financial Corporation (NASDAQ:LKFN)||6||7||8|
|First Merchants Corporation (NASDAQ:FRME)||11||3||8|
|Taylor Capital Group Inc (NASDAQ:TAYC)||6||1||0|
With the results exhibited by our tactics, retail investors should always watch hedge fund and insider trading activity, and Wilshire Bancorp Inc (NASDAQ:WIBC) applies perfectly to this mantra.