Hedge Funds Are Selling Signature Bank (SBNY)

Signature Bank (NASDAQ:SBNY) was in 10 hedge funds’ portfolio at the end of the fourth quarter of 2012. SBNY has experienced a decrease in hedge fund sentiment lately. There were 11 hedge funds in our database with SBNY holdings at the end of the previous quarter.

Signature Bank (NASDAQ:SBNY)In the 21st century investor’s toolkit, there are many metrics market participants can use to analyze publicly traded companies. A duo of the most useful are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best investment managers can outpace the broader indices by a significant margin (see just how much).

Equally as integral, positive insider trading activity is a second way to parse down the financial markets. Just as you’d expect, there are many motivations for an insider to cut shares of his or her company, but only one, very simple reason why they would behave bullishly. Various academic studies have demonstrated the useful potential of this strategy if piggybackers know where to look (learn more here).

With all of this in mind, we’re going to take a glance at the recent action encompassing Signature Bank (NASDAQ:SBNY).

How are hedge funds trading Signature Bank (NASDAQ:SBNY)?

At the end of the fourth quarter, a total of 10 of the hedge funds we track were long in this stock, a change of -9% from the third quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings substantially.

When looking at the hedgies we track, Donald Chiboucis’s Columbus Circle Investors had the biggest position in Signature Bank (NASDAQ:SBNY), worth close to $58.5 million, comprising 0.5% of its total 13F portfolio. Sitting at the No. 2 spot is Conatus Capital Management, managed by David Stemerman, which held a $36.1 million position; the fund has 1.6% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Robert B. Gillam’s McKinley Capital Management, Cliff Asness’s AQR Capital Management and Jim Simons’s Renaissance Technologies.

Since Signature Bank (NASDAQ:SBNY) has experienced falling interest from the aggregate hedge fund industry, we can see that there lies a certain “tier” of funds who sold off their full holdings in Q4. At the top of the heap, Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners dumped the largest investment of the “upper crust” of funds we watch, totaling close to $0.3 million in stock. These bearish behaviors are interesting, as total hedge fund interest was cut by 1 funds in Q4.

Insider trading activity in Signature Bank (NASDAQ:SBNY)

Bullish insider trading is at its handiest when the primary stock in question has seen transactions within the past half-year. Over the last half-year time frame, Signature Bank (NASDAQ:SBNY) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Signature Bank (NASDAQ:SBNY). These stocks are National Penn Bancshares (NASDAQ:NPBC), Valley National Bancorp (NYSE:VLY), Webster Financial Corporation (NYSE:WBS), Susquehanna Bancshares Inc (NASDAQ:SUSQ), and Fulton Financial Corp (NASDAQ:FULT). This group of stocks are the members of the regional – northeast banks industry and their market caps are closest to SBNY’s market cap.