Is PacWest Bancorp (NASDAQ:PACW) worth your attention right now? Hedge funds are in a bearish mood. The number of bullish hedge fund bets decreased by 4 lately.
If you’d ask most shareholders, hedge funds are seen as slow, old investment vehicles of years past. While there are greater than 8000 funds with their doors open today, we at Insider Monkey choose to focus on the leaders of this group, close to 450 funds. It is estimated that this group controls most of all hedge funds’ total asset base, and by paying attention to their best investments, we have formulated a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per 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 outpaced the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Just as beneficial, positive insider trading sentiment is a second way to break down the marketplace. Obviously, there are a number of reasons for an executive to downsize shares of his or her company, but just one, very obvious reason why they would behave bullishly. Plenty of academic studies have demonstrated the valuable potential of this strategy if piggybackers know where to look (learn more here).
With all of this in mind, let’s take a glance at the latest action surrounding PacWest Bancorp (NASDAQ:PACW).
How are hedge funds trading PacWest Bancorp (NASDAQ:PACW)?
In preparation for this year, a total of 9 of the hedge funds we track were long in this stock, a change of -31% from one quarter earlier. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes meaningfully.
When looking at the hedgies we track, Cliff Asness’s AQR Capital Management had the biggest position in PacWest Bancorp (NASDAQ:PACW), worth close to $8.2 million, accounting for less than 0.1%% of its total 13F portfolio. On AQR Capital Management’s heels is Sirios Capital Management, managed by John Brennan, which held a $5.8 million position; 1% of its 13F portfolio is allocated to the stock. Remaining hedge funds with similar optimism include Jim Simons’s Renaissance Technologies, Dmitry Balyasny’s Balyasny Asset Management and Ken Gray and Steve Walsh’s Bryn Mawr Capital.
Judging by the fact that PacWest Bancorp (NASDAQ:PACW) has experienced declining sentiment from the smart money, it’s safe to say that there was a specific group of fund managers who sold off their positions entirely at the end of the year. Interestingly, Israel Englander’s Millennium Management dumped the largest investment of the “upper crust” of funds we watch, worth an estimated $1.8 million in stock.. Neil Chriss’s fund, Hutchin Hill Capital, also said goodbye to its stock, about $0.8 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 4 funds at the end of the year.
What have insiders been doing with PacWest Bancorp (NASDAQ:PACW)?
Insider purchases made by high-level executives is most useful when the company in focus has seen transactions within the past 180 days. Over the latest six-month time period, PacWest Bancorp (NASDAQ:PACW) has seen zero unique insiders purchasing, and 2 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to PacWest Bancorp (NASDAQ:PACW). These stocks are First Interstate Bancsystem Inc (NASDAQ:FIBK), WestAmerica Bancorp. (NASDAQ:WABC), Western Alliance Bancorporation (NYSE:WAL), CVB Financial Corp. (NASDAQ:CVBF), and BBCN Bancorp, Inc. (NASDAQ:BBCN). This group of stocks are the members of the regional – pacific banks industry and their market caps match PACW’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|First Interstate Bancsystem Inc (NASDAQ:FIBK)||4||2||8|
|WestAmerica Bancorp. (NASDAQ:WABC)||7||0||3|
|Western Alliance Bancorporation (NYSE:WAL)||11||0||8|
|CVB Financial Corp. (NASDAQ:CVBF)||9||1||5|
|BBCN Bancorp, Inc. (NASDAQ:BBCN)||10||0||0|
With the results demonstrated by the aforementioned studies, everyday investors must always keep an eye on hedge fund and insider trading activity, and PacWest Bancorp (NASDAQ:PACW) is no exception.