Before putting in our own effort and resources into finding a good investment, we can quickly utilize hedge fund expertise to give us a quick glimpse of whether that stock could make for a good addition to our portfolios. The odds are not exactly stacked in investors’ favor when it comes to beating the market, as evidenced by the fact that less than 49% of the stocks in the S&P 500 did so during the 12-month period ending October 30. However, 63% of hedge funds’ top 30 stock picks from the index did beat the market, and returned nearly twice as much on average as the index. Thus, we can see that the tireless research and efforts of hedge funds to identify winning stocks can work to our advantage when we know how to use the data. While not all of their picks will be winners, our odds are much better following their best stock picks than trying to go it alone.
Investors Bancorp, Inc. (NASDAQ:ISBC) shareholders have witnessed a decrease in activity from the world’s largest hedge funds recently. ISBC was in 26 hedge funds’ portfolios at the end of September. There were 34 hedge funds in our database with ISBC positions 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 King Digital Entertainment PLC (NYSE:KING), Orbital ATK Inc (NYSE:OA), and ICON plc – Ordinary Shares (NASDAQ:ICLR) to gather more data points.
Keeping this in mind, we’re going to take a gander at the fresh action regarding Investors Bancorp, Inc. (NASDAQ:ISBC).
Hedge fund activity in Investors Bancorp, Inc. (NASDAQ:ISBC)
At the end of the third quarter, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -24% from the second quarter. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Blue Harbour Group, managed by Clifton S. Robbins, holds the most valuable position in Investors Bancorp, Inc. (NASDAQ:ISBC). Blue Harbour Group has a $352.6 million position in the stock, comprising 11% of its 13F portfolio. The second most bullish fund manager is Empyrean Capital Partners, led by Michael A. Price and Amos Meron, holding a $110.9 million position; 5.5% of its 13F portfolio is allocated to the stock. Other members of the smart money with similar optimism encompass Jim Simons’ Renaissance Technologies, Emanuel J. Friedman’s EJF Capital and Lee Munder’s Lee Munder Capital Group.
Since Investors Bancorp, Inc. (NASDAQ:ISBC) has faced bearish sentiment from the smart money, it’s safe to say that there exists a select few hedgies who sold off their positions entirely in the third quarter. At the top of the heap, Jonathon Jacobson’s Highfields Capital Management said goodbye to the biggest investment of all the hedgies watched by Insider Monkey, totaling about $37 million in stock, and Paul Orlin and Alex Porter’s Amici Capital was right behind this move, as the fund said goodbye to about $27.8 million worth. These moves are important to note, as total hedge fund interest dropped by 8 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Investors Bancorp, Inc. (NASDAQ:ISBC) but similarly valued. We will take a look at King Digital Entertainment PLC (NYSE:KING), Orbital ATK Inc (NYSE:OA), ICON plc – Ordinary Shares (NASDAQ:ICLR), and Core Laboratories N.V. (NYSE:CLB). This group of stocks’ market caps match ISBC’s market cap.
|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 24.75 hedge funds with bullish positions and the average amount invested in these stocks was $355 million. That figure was $690 million in ISBC’s case. Orbital ATK Inc (NYSE:OA) is the most popular stock in this table. On the other hand King Digital Entertainment PLC (NYSE:KING) is the least popular one with only 18 bullish hedge fund positions. Investors Bancorp, Inc. (NASDAQ:ISBC) 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 OA might be a better candidate to consider a long position.