Is Fulton Financial Corp (FULT) A Good Stock To Buy?

Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those successful funds in these small-cap stocks. In the following paragraphs, we analyze Fulton Financial Corp (NASDAQ:FULT) from the perspective of those successful funds.

Is Fulton Financial Corp (NASDAQ:FULT) a buy here? The smart money is indeed in a bullish mood. The number of bullish hedge fund bets that are revealed through the 13F filings went up by 2 recently. FULT was in 10 hedge funds’ portfolios at the end of the third quarter of 2016. There were 8 hedge funds in our database with FULT 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 Versum Materials Inc (NYSE:VSM), FireEye Inc (NASDAQ:FEYE), and Pinnacle Financial Partners (NASDAQ:PNFP) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

With all of this in mind, we’re going to view the new action surrounding Fulton Financial Corp (NASDAQ:FULT).

How have hedgies been trading Fulton Financial Corp (NASDAQ:FULT)?

Heading into the fourth quarter of 2016, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25% from the previous quarter. On the other hand, there were a total of 8 hedge funds with a bullish position in FULT at the beginning of this year. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Cliff Asness’s AQR Capital Management has the biggest position in Fulton Financial Corp (NASDAQ:FULT), worth close to $25.6 million, comprising less than 0.1%% of its total 13F portfolio. On AQR Capital Management’s heels is Alpenglow Capital, led by Sharif Siddiqui, which holds a $5 million position; the fund has 4% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism contain Ken Griffin’s Citadel Investment Group, Solomon Kumin’s Folger Hill Asset Management and Tom Russo’s Gardner Russo & Gardner. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

As one would reasonably expect, specific money managers have been driving this bullishness. Alpenglow Capital, led by Sharif Siddiqui, established the most outsized position in Fulton Financial Corp (NASDAQ:FULT). Alpenglow Capital had $5 million invested in the company at the end of the quarter. Solomon Kumin’s Folger Hill Asset Management also initiated a $1.6 million position during the quarter. The other funds with brand new FULT positions are Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Mike Vranos’s Ellington, and Millennium Management, one of the 10 largest hedge funds in the world.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Fulton Financial Corp (NASDAQ:FULT) but similarly valued. These stocks are Versum Materials Inc (NYSE:VSM), FireEye Inc (NASDAQ:FEYE), Pinnacle Financial Partners (NASDAQ:PNFP), and Compass Minerals International, Inc. (NYSE:CMP). This group of stocks’ market values are closest to FULT’s market value.

As you can see these stocks had an average of 15.25 hedge funds with bullish positions and the average amount invested in these stocks was $113 million. That figure was $37 million in FULT’s case. FireEye Inc (NASDAQ:FEYE) is the most popular stock in this table. On the other hand Compass Minerals International, Inc. (NYSE:CMP) is the least popular one with only 6 bullish hedge fund positions. Fulton Financial Corp (NASDAQ:FULT) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard FEYE might be a better candidate to consider taking a long position in.

Disclosure: None