Is Webster Financial Corporation (NYSE:WBS) worth your attention right now? Money managers are turning less bullish. The number of long hedge fund positions fell by 5 recently.
In the eyes of most stock holders, hedge funds are perceived as slow, old investment tools of the past. While there are greater than 8000 funds trading at present, we look at the masters of this group, around 450 funds. It is widely believed that this group controls the lion’s share of all hedge funds’ total asset base, and by watching their best stock picks, we have figured out a number of investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Equally as important, optimistic insider trading activity is a second way to parse down the marketplace. Just as you’d expect, there are plenty of motivations for an upper level exec to downsize shares of his or her company, but only one, very simple reason why they would behave bullishly. Plenty of academic studies have demonstrated the market-beating potential of this strategy if shareholders understand where to look (learn more here).
Keeping this in mind, we’re going to take a gander at the recent action regarding Webster Financial Corporation (NYSE:WBS).
How are hedge funds trading Webster Financial Corporation (NYSE:WBS)?
At the end of the first quarter, a total of 17 of the hedge funds we track were long in this stock, a change of -23% from the previous quarter.
Because Webster Financial Corporation (NYSE:WBS) has experienced a declination in interest from hedge fund managers, it’s safe to say that there lies a certain “tier” of fund managers who were dropping their full holdings heading into Q2. Interestingly, Clint Carlson’s Carlson Capital dumped the biggest stake of the “upper crust” of funds we watch, worth an estimated $11.4 million in stock.. Anand Parekh’s fund, Alyeska Investment Group, also dropped its stock, about $5.1 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 5 funds heading into Q2.
What have insiders been doing with Webster Financial Corporation (NYSE:WBS)?
Insider purchases made by high-level executives is best served when the company we’re looking at has seen transactions within the past half-year. Over the last half-year time frame, Webster Financial Corporation (NYSE:WBS) has seen zero unique insiders buying, and 10 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Webster Financial Corporation (NYSE:WBS). These stocks are Signature Bank (NASDAQ:SBNY), National Penn Bancshares (NASDAQ:NPBC), Fulton Financial Corp (NASDAQ:FULT), Susquehanna Bancshares Inc (NASDAQ:SUSQ), and Valley National Bancorp (NYSE:VLY). All of these stocks are in the regional – northeast banks industry and their market caps are similar to WBS’s market cap.