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Central Pacific Financial Corp. (CPF): Are Hedge Funds Right About This Stock?

Central Pacific Financial Corp. (NYSE:CPF) was in 9 hedge funds’ portfolio at the end of March. CPF has seen a decrease in support from the world’s most elite money managers recently. There were 9 hedge funds in our database with CPF holdings at the end of the previous quarter.

In the 21st century investor’s toolkit, there are dozens of indicators investors can use to watch their holdings. A couple of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best money managers can outpace their index-focused peers by a solid amount (see just how much).

Just as key, bullish insider trading activity is another way to break down the investments you’re interested in. Obviously, there are a variety of reasons for an executive to downsize shares of his or her company, but only one, very obvious reason why they would behave bullishly. Plenty of academic studies have demonstrated the useful potential of this strategy if you know where to look (learn more here).

With these “truths” under our belt, we’re going to take a glance at the recent action regarding Central Pacific Financial Corp. (NYSE:CPF).

How have hedgies been trading Central Pacific Financial Corp. (NYSE:CPF)?

In preparation for this quarter, a total of 9 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 few key hedge fund managers who were increasing their stakes meaningfully.

According to our comprehensive database, Kevin Michael Ulrich’s Anchorage Advisors had the biggest position in Central Pacific Financial Corp. (NYSE:CPF), worth close to $148.6 million, accounting for 9% of its total 13F portfolio. On Anchorage Advisors’s heels is Seth Klarman of Baupost Group, with a $28.3 million position; the fund has 0.9% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Doug Silverman and Alexander Klabin’s Senator Investment Group, Jonathan Kolatch’s Redwood Capital Management and D. E. Shaw’s D E Shaw.

Because Central Pacific Financial Corp. (NYSE:CPF) has witnessed declining sentiment from the smart money, logic holds that there were a few hedge funds who were dropping their entire stakes in Q1. Interestingly, Douglas W. Case’s Advanced Investment Partners dropped the largest stake of all the hedgies we monitor, totaling close to $0.5 million in stock. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

How are insiders trading Central Pacific Financial Corp. (NYSE:CPF)?

Insider trading activity, especially when it’s bullish, is particularly usable when the primary stock in question has seen transactions within the past six months. Over the latest half-year time period, Central Pacific Financial Corp. (NYSE:CPF) has seen 1 unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Central Pacific Financial Corp. (NYSE:CPF). These stocks are PacWest Bancorp (NASDAQ:PACW), BBCN Bancorp, Inc. (NASDAQ:BBCN), West Coast Bancorp (NASDAQ:WCBO), Hanmi Financial Corp (NASDAQ:HAFC), and First Interstate Bancsystem Inc (NASDAQ:FIBK). This group of stocks are the members of the regional – pacific banks industry and their market caps resemble CPF’s market cap.

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