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BancorpSouth, Inc. (BXS): Insiders Are Buying, Should You?

BancorpSouth, Inc. (NYSE:BXS) was in 12 hedge funds’ portfolio at the end of the first quarter of 2013. BXS investors should be aware of an increase in enthusiasm from smart money of late. There were 11 hedge funds in our database with BXS positions at the end of the previous quarter.

In the 21st century investor’s toolkit, there are dozens of indicators market participants can use to watch publicly traded companies. Some of the most under-the-radar are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top money managers can beat the market by a solid amount (see just how much).

Just as integral, bullish insider trading sentiment is a second way to break down the financial markets. There are a variety of incentives for an upper level exec to sell shares of his or her company, but only one, very clear reason why they would buy. Several academic studies have demonstrated the valuable potential of this strategy if shareholders know what to do (learn more here).

Keeping this in mind, it’s important to take a glance at the latest action surrounding BancorpSouth, Inc. (NYSE:BXS).

How are hedge funds trading BancorpSouth, Inc. (NYSE:BXS)?

At Q1’s end, a total of 12 of the hedge funds we track held long positions in this stock, a change of 9% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their holdings substantially.

BancorpSouth, Inc. (NYSE:BXS)According to our comprehensive database, David Dreman’s Dreman Value Management had the largest position in BancorpSouth, Inc. (NYSE:BXS), worth close to $29.5 million, accounting for 0.8% of its total 13F portfolio. The second largest stake is held by Richard S. Pzena of Pzena Investment Management, with a $15.3 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other peers that are bullish include Chuck Royce’s Royce & Associates, Matthew Lindenbaum’s Basswood Capital and Richard Chilton’s Chilton Investment Company.

Now, specific money managers were breaking ground themselves. Pzena Investment Management, managed by Richard S. Pzena, created the largest position in BancorpSouth, Inc. (NYSE:BXS). Pzena Investment Management had 15.3 million invested in the company at the end of the quarter. Joel Greenblatt’s Gotham Asset Management also initiated a $0.2 million position during the quarter.

How have insiders been trading BancorpSouth, Inc. (NYSE:BXS)?

Bullish insider trading is most useful when the company in focus has experienced transactions within the past half-year. Over the latest six-month time frame, BancorpSouth, Inc. (NYSE:BXS) has experienced 1 unique insiders purchasing, and 2 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to BancorpSouth, Inc. (NYSE:BXS). These stocks are EverBank Financial Corp (NYSE:EVER), F.N.B. Corp (NYSE:FNB), Trustmark Corp (NASDAQ:TRMK), IBERIABANK Corporation (NASDAQ:IBKC), and Bank Of The Ozarks Inc (NASDAQ:OZRK). All of these stocks are in the regional – southeast banks industry and their market caps resemble BXS’s market cap.