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Is FCB Financial Holdings Inc (FCB) Going to Burn These Hedge Funds?

“Market volatility has picked up again over the past few weeks. Headlines highlight risks regarding interest rates, the Fed, China, house prices, auto sales, trade wars, and more. Uncertainty abounds. But doesn’t it always? I have no view on whether the recent volatility will continue for a while, or whether the market will be back at all-time highs before we know it. I remain focused on preserving and growing our capital, and continue to believe that the best way to do so is via a value-driven, concentrated, patient approach. I shun consensus holdings, rich valuations, and market fads, in favor of solid, yet frequently off-the-beaten-path, businesses run by excellent, aligned management teams, purchased at deep discounts to intrinsic value,” are the words of Maran Capital’s Dan Roller. His stock picks have been beating the S&P 500 Index handily. We pay attention to what hedge funds are doing in a particular stock before considering a potential investment because it works for us. So let’s take a glance at the smart money sentiment towards FCB Financial Holdings Inc (NYSE:FCB) and see how it was affected.

Is FCB Financial Holdings Inc (NYSE:FCB) undervalued? Investors who are in the know are in a bullish mood. The number of bullish hedge fund positions advanced by 5 lately. Our calculations also showed that FCB isn’t among the 30 most popular stocks among hedge funds. FCB was in 23 hedge funds’ portfolios at the end of the third quarter of 2018. There were 18 hedge funds in our database with FCB positions at the end of the previous quarter.

Today there are a multitude of indicators shareholders put to use to assess stocks. Some of the most under-the-radar indicators are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the best picks of the best money managers can trounce their index-focused peers by a significant amount (see the details here).

MILLENNIUM MANAGEMENT

We’re going to analyze the recent hedge fund action regarding FCB Financial Holdings Inc (NYSE:FCB).

How have hedgies been trading FCB Financial Holdings Inc (NYSE:FCB)?

Heading into the fourth quarter of 2018, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of 28% from the second quarter of 2018. By comparison, 14 hedge funds held shares or bullish call options in FCB heading into this year. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

FCB_dec2018

Among these funds, Magnetar Capital held the most valuable stake in FCB Financial Holdings Inc (NYSE:FCB), which was worth $40.3 million at the end of the third quarter. On the second spot was Daruma Asset Management which amassed $29.6 million worth of shares. Moreover, Alpine Associates, Millennium Management, and Elizabeth Park Capital Management were also bullish on FCB Financial Holdings Inc (NYSE:FCB), allocating a large percentage of their portfolios to this stock.

As industrywide interest jumped, some big names were leading the bulls’ herd. Magnetar Capital, managed by Alec Litowitz and Ross Laser, established the most valuable position in FCB Financial Holdings Inc (NYSE:FCB). Magnetar Capital had $40.3 million invested in the company at the end of the quarter. Robert Emil Zoellner’s Alpine Associates also initiated a $24.6 million position during the quarter. The following funds were also among the new FCB investors: John Orrico’s Water Island Capital, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Ian Simm’s Impax Asset Management.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as FCB Financial Holdings Inc (NYSE:FCB) but similarly valued. These stocks are Hamilton Lane Incorporated (NASDAQ:HLNE), TC Pipelines, LP (NYSE:TCP), Franklin Electric Co., Inc. (NASDAQ:FELE), and MGE Energy, Inc. (NASDAQ:MGEE). This group of stocks’ market values are similar to FCB’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HLNE 12 93069 5
TCP 4 6039 1
FELE 10 220975 3
MGEE 8 32507 0
Average 8.5 88148 2.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 8.5 hedge funds with bullish positions and the average amount invested in these stocks was $88 million. That figure was $211 million in FCB’s case. Hamilton Lane Incorporated (NASDAQ:HLNE) is the most popular stock in this table. On the other hand TC Pipelines, LP (NYSE:TCP) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks FCB Financial Holdings Inc (NYSE:FCB) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

Disclosure: None. This article was originally published at Insider Monkey.

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