A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Texas Capital Bancshares Inc (NASDAQ:TCBI) .
Texas Capital Bancshares Inc (NASDAQ:TCBI) investors should pay attention to a decrease in hedge fund interest of late. TCBI was in 15 hedge funds’ portfolios at the end of September. There were 18 hedge funds in our database with TCBI holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Melco Crown Entertainment Ltd (ADR) (NASDAQ:MPEL), BancorpSouth, Inc. (NYSE:BXS), and SunPower Corporation (NASDAQ:SPWR) to gather more data points.
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.
How are hedge funds trading Texas Capital Bancshares Inc (NASDAQ:TCBI)?
At the end of the third quarter, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a drop of 17% from the second quarter of 2016. On the other hand, there were a total of 15 hedge funds with a bullish position in TCBI at the beginning of this year. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Citadel Investment Group, led by Ken Griffin, holds the biggest position in Texas Capital Bancshares Inc (NASDAQ:TCBI). Citadel Investment Group has a $58.9 million position in the stock. On Citadel Investment Group’s heels is Mariko Gordon of Daruma Asset Management, with a $58 million position; the fund has 3.5% of its 13F portfolio invested in the stock. Some other peers that are bullish comprise Israel Englander’s Millennium Management, Ken Fisher’s Fisher Asset Management and David E. Winebrenner’s Spindletop Capital. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that said goodbye to their entire stakes in the stock during the third quarter. Intriguingly, Matthew Lindenbaum’s Basswood Capital said goodbye to the largest stake of all the hedgies followed by Insider Monkey, totaling close to $10.2 million in stock, and Matthew Hulsizer’s PEAK6 Capital Management was right behind this move, as the fund said goodbye to about $0.4 million worth of shares.
Let’s also examine hedge fund activity in other stocks similar to Texas Capital Bancshares Inc (NASDAQ:TCBI). These stocks are Melco Crown Entertainment Ltd (ADR) (NASDAQ:MPEL), BancorpSouth, Inc. (NYSE:BXS), SunPower Corporation (NASDAQ:SPWR), and Knight Transportation (NYSE:KNX). This group of stocks’ market values are closest to TCBI’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 14 hedge funds with bullish positions and the average amount invested in these stocks was $159 million. That figure was $256 million in TCBI’s case. SunPower Corporation (NASDAQ:SPWR) is the most popular stock in this table. On the other hand Knight Transportation (NYSE:KNX) is the least popular one with only 9 bullish hedge fund positions. Texas Capital Bancshares Inc (NASDAQ:TCBI) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SPWR might be a better candidate to consider taking a long position in.