Is The Bank of Nova Scotia (USA) (NYSE:BNS) a first-rate stock to buy now? The best stock pickers are taking a pessimistic view. The number of bullish hedge fund positions fell by 5 lately.
In the financial world, there are dozens of metrics shareholders can use to analyze the equity markets. A pair of the most useful are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite money managers can outpace their index-focused peers by a very impressive amount (see just how much).
Just as important, positive insider trading activity is another way to break down the marketplace. There are many motivations for a bullish insider to get rid of shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Plenty of academic studies have demonstrated the useful potential of this strategy if “monkeys” understand where to look (learn more here).
Now, let’s take a look at the key action regarding The Bank of Nova Scotia (USA) (NYSE:BNS).
Hedge fund activity in The Bank of Nova Scotia (USA) (NYSE:BNS)
Heading into Q2, a total of 9 of the hedge funds we track were long in this stock, a change of -36% from one quarter earlier. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their holdings meaningfully.
When looking at the hedgies we track, Tetrem Capital Management, managed by Daniel Bubis, holds the most valuable position in The Bank of Nova Scotia (USA) (NYSE:BNS). Tetrem Capital Management has a $118.9 million position in the stock, comprising 3.6% of its 13F portfolio. The second largest stake is held by Jim Simons of Renaissance Technologies, with a $26.1 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other peers that are bullish include D. E. Shaw’s D E Shaw, and J. Alan Reid, Jr.’s Forward Management.
Seeing as The Bank of Nova Scotia (USA) (NYSE:BNS) has witnessed declining sentiment from the entirety of the hedge funds we track, we can see that there were a few fund managers who were dropping their full holdings in Q1. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital cut the largest position of the “upper crust” of funds we key on, comprising an estimated $52.1 million in stock.. Malcolm Fairbairn’s fund, Ascend Capital, also cut its stock, about $7.6 million worth. These moves are important to note, as aggregate hedge fund interest fell by 5 funds in Q1.
Insider trading activity in The Bank of Nova Scotia (USA) (NYSE:BNS)
Insider purchases made by high-level executives is particularly usable when the company in question has seen transactions within the past half-year. Over the latest 180-day time frame, The Bank of Nova Scotia (USA) (NYSE:BNS) has seen zero unique insiders purchasing, 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 The Bank of Nova Scotia (USA) (NYSE:BNS). These stocks are Citigroup Inc. (NYSE:C), Bank of America Corp (NYSE:BAC), Bank of Montreal (USA) (NYSE:BMO), Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU), and Toronto-Dominion Bank (USA) (NYSE:TD). This group of stocks belong to the money center banks industry and their market caps resemble BNS’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Citigroup Inc. (NYSE:C)||118||2||0|
|Bank of America Corp (NYSE:BAC)||93||1||1|
|Bank of Montreal (USA) (NYSE:BMO)||12||0||0|
|Mitsubishi UFJ Financial Group Inc (ADR) (NYSE:MTU)||8||0||0|
|Toronto-Dominion Bank (USA) (NYSE:TD)||10||0||0|
With the returns shown by the aforementioned strategies, everyday investors must always pay attention to hedge fund and insider trading sentiment, and The Bank of Nova Scotia (USA) (NYSE:BNS) shareholders fit into this picture quite nicely.