Reputable billionaire investors such as Nelson Peltz and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.
FCB Financial Holdings Inc (NYSE:FCB) investors should pay attention to a decrease in hedge fund sentiment recently. FCB was in 21 hedge funds’ portfolios at the end of the third quarter of 2016. There were 23 hedge funds in our database with FCB positions at the end of the previous quarter. At the end of this article we will also compare FCB to other stocks including Flagstar Bancorp Inc (NYSE:FBC), Consolidated Communications Holdings Inc (NASDAQ:CNSL), and Ship Finance International Limited (NYSE:SFL) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
What does the smart money think about FCB Financial Holdings Inc (NYSE:FCB)?
At the end of the third quarter, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 9% fall from one quarter earlier. While fluctuating up and down throughout the last year, hedge fund ownership has nonetheless remained very stable, at between 21 and 23 funds long the stock. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Elliott Management, managed by Paul Singer, holds the largest position in FCB Financial Holdings Inc (NYSE:FCB). Elliott Management has a $51.2 million position in the stock. The second most bullish fund manager is Citadel Investment Group, led by Ken Griffin, holding a $16.1 million position. Remaining peers with similar optimism consist of Fred Cummings’ Elizabeth Park Capital Management, Sharif Siddiqui’s Alpenglow Capital and Paritosh Gupta’s Adi Capital Management.
Because FCB Financial Holdings Inc (NYSE:FCB) has faced bearish sentiment from the smart money, it’s easy to see that there was a specific group of fund managers who sold off their full holdings by the end of the third quarter. At the top of the heap, Leon Cooperman’s Omega Advisors dropped the largest stake of the 700 funds followed by Insider Monkey, comprising close to $17.9 million in stock. Bernard Selz’s fund, Selz Capital, also said goodbye to its stock, about $1.2 million worth. These transactions are interesting, as total hedge fund interest fell by 2 funds by the end of the third quarter.
Let’s now review hedge fund activity in other stocks similar to FCB Financial Holdings Inc (NYSE:FCB). We will take a look at Flagstar Bancorp Inc (NYSE:FBC), Consolidated Communications Holdings Inc (NASDAQ:CNSL), Ship Finance International Limited (NYSE:SFL), and Air Methods Corp (NASDAQ:AIRM). This group of stocks’ market values are similar to FCB’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $55 million. That figure was $128 million in FCB’s case. Air Methods Corp (NASDAQ:AIRM) is the most popular stock in this table. On the other hand Consolidated Communications Holdings Inc (NASDAQ:CNSL) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks FCB Financial Holdings Inc (NYSE:FCB) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.