Is International Bancshares Corp (NASDAQ:IBOC) a worthy stock to buy now? Hedge funds are taking a pessimistic view. The number of bullish hedge fund bets decreased by 3 recently.
If you’d ask most market participants, hedge funds are assumed to be worthless, old financial vehicles of yesteryear. While there are greater than 8000 funds trading at present, we hone in on the masters of this club, about 450 funds. Most estimates calculate that this group oversees the lion’s share of the smart money’s total asset base, and by keeping an eye on their top picks, we have deciphered a few investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually 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 topped the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Just as important, bullish insider trading sentiment is a second way to break down the stock market universe. Obviously, there are plenty of stimuli for an executive to cut shares of his or her company, but just one, very obvious reason why they would buy. Various academic studies have demonstrated the market-beating potential of this strategy if you understand where to look (learn more here).
Now, let’s take a glance at the key action encompassing International Bancshares Corp (NASDAQ:IBOC).
How have hedgies been trading International Bancshares Corp (NASDAQ:IBOC)?
Heading into Q2, a total of 5 of the hedge funds we track were long in this stock, a change of -38% from one quarter earlier. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were boosting their stakes meaningfully.
According to our comprehensive database, Bernard Horn’s Polaris Capital Management had the most valuable position in International Bancshares Corp (NASDAQ:IBOC), worth close to $47 million, accounting for 2.8% of its total 13F portfolio. Coming in second is AQR Capital Management, managed by Cliff Asness, which held a $13.6 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedgies that are bullish include David Dreman’s Dreman Value Management, Ken Griffin’s Citadel Investment Group and D. E. Shaw’s D E Shaw.
Seeing as International Bancshares Corp (NASDAQ:IBOC) has experienced bearish sentiment from hedge fund managers, it’s easy to see that there were a few hedge funds that slashed their full holdings heading into Q2. It’s worth mentioning that Ken Gray and Steve Walsh’s Bryn Mawr Capital cut the largest position of the “upper crust” of funds we track, worth close to $0.8 million in stock.. Israel Englander’s fund, Millennium Management, also dropped its stock, about $0.5 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 3 funds heading into Q2.
Insider trading activity in International Bancshares Corp (NASDAQ:IBOC)
Insider trading activity, especially when it’s bullish, is most useful when the company in focus has seen transactions within the past 180 days. Over the latest 180-day time period, International Bancshares Corp (NASDAQ:IBOC) 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 International Bancshares Corp (NASDAQ:IBOC). These stocks are BancFirst Corporation (NASDAQ:BANF), Prosperity Bancshares, Inc. (NYSE:PB), UMB Financial Corporation (NASDAQ:UMBF), Texas Capital Bancshares Inc (NASDAQ:TCBI), and First Financial Bankshares Inc (NASDAQ:FFIN). This group of stocks are in the regional – southwest banks industry and their market caps resemble IBOC’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| BancFirst Corporation (NASDAQ:BANF) | 4 | 1 | 3 |
| Prosperity Bancshares, Inc. (NYSE:PB) | 7 | 1 | 4 |
| UMB Financial Corporation (NASDAQ:UMBF) | 4 | 1 | 8 |
| Texas Capital Bancshares Inc (NASDAQ:TCBI) | 18 | 1 | 7 |
| First Financial Bankshares Inc (NASDAQ:FFIN) | 3 | 2 | 0 |
With the results exhibited by our studies, everyday investors must always pay attention to hedge fund and insider trading sentiment, and International Bancshares Corp (NASDAQ:IBOC) is no exception.
