Is Umpqua Holdings Corp (NASDAQ:UMPQ) the right investment to pursue these days? Prominent investors are becoming more confident. The number of long hedge fund bets inched up by 5 in recent months.
If you’d ask most stock holders, hedge funds are assumed to be unimportant, old investment vehicles of the past. While there are greater than 8000 funds with their doors open today, we at Insider Monkey look at the leaders of this group, close to 450 funds. Most estimates calculate that this group oversees the majority of the smart money’s total asset base, and by paying attention to their best investments, we have spotted a few investment strategies that have historically beaten the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 24 percentage points in 7 months (see the details here).
Just as important, bullish insider trading activity is another way to parse down the investments you’re interested in. Just as you’d expect, there are a variety of incentives for an upper level exec to get rid of shares of his or her company, but just one, very obvious reason why they would buy. Various empirical studies have demonstrated the impressive potential of this method if you understand what to do (learn more here).
With all of this in mind, we’re going to take a look at the latest action encompassing Umpqua Holdings Corp (NASDAQ:UMPQ).
What have hedge funds been doing with Umpqua Holdings Corp (NASDAQ:UMPQ)?
At year’s end, a total of 12 of the hedge funds we track were bullish in this stock, a change of 71% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their stakes meaningfully.
Of the funds we track, Royce & Associates, managed by Chuck Royce, holds the largest position in Umpqua Holdings Corp (NASDAQ:UMPQ). Royce & Associates has a $22.8 million position in the stock, comprising 0.1% of its 13F portfolio. On Royce & Associates’s heels is Cliff Asness of AQR Capital Management, with a $6.8 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other hedge funds with similar optimism include David Dreman’s Dreman Value Management, Ken Griffin’s Citadel Investment Group and Israel Englander’s Millennium Management.
Now, key hedge funds have jumped into Umpqua Holdings Corp (NASDAQ:UMPQ) headfirst. Ellington, managed by Mike Vranos, assembled the most valuable position in Umpqua Holdings Corp (NASDAQ:UMPQ). Ellington had 0.4 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also initiated a $0.4 million position during the quarter. The other funds with brand new UMPQ positions are Steven Cohen’s SAC Capital Advisors, Joel Greenblatt’s Gotham Asset Management, and D. E. Shaw’s D E Shaw.
How are insiders trading Umpqua Holdings Corp (NASDAQ:UMPQ)?
Bullish insider trading is best served when the company we’re looking at has seen transactions within the past 180 days. Over the last six-month time frame, Umpqua Holdings Corp (NASDAQ:UMPQ) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Umpqua Holdings Corp (NASDAQ:UMPQ). These stocks are CVB Financial Corp. (NASDAQ:CVBF), Western Alliance Bancorporation (NYSE:WAL), WestAmerica Bancorp. (NASDAQ:WABC), Glacier Bancorp, Inc. (NASDAQ:GBCI), and Cathay General Bancorp (NASDAQ:CATY). This group of stocks are in the regional – pacific banks industry and their market caps match UMPQ’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| CVB Financial Corp. (NASDAQ:CVBF) | 9 | 1 | 5 |
| Western Alliance Bancorporation (NYSE:WAL) | 11 | 0 | 8 |
| WestAmerica Bancorp. (NASDAQ:WABC) | 7 | 0 | 3 |
| Glacier Bancorp, Inc. (NASDAQ:GBCI) | 9 | 0 | 0 |
| Cathay General Bancorp (NASDAQ:CATY) | 7 | 1 | 6 |
With the returns shown by Insider Monkey’s studies, everyday investors should always monitor hedge fund and insider trading activity, and Umpqua Holdings Corp (NASDAQ:UMPQ) is an important part of this process.
