Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we follow the hedge fund activity in the small-cap space.
Is Prosperity Bancshares, Inc. (NYSE:PB) a good investment right now? The smart money is really becoming less confident. The number of bullish hedge fund positions that are disclosed in regulatory 13F filings decreased by 1 recently. There were 10 hedge funds in our database with PB positions at the end of the 2016 third 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 CyrusOne Inc (NASDAQ:CONE), Vanguard International Equity Index Funds (NASDAQ:VNQI), and Equity Commonwealth (NYSE:EQC) 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.
Now, we’re going to take a gander at the fresh action regarding Prosperity Bancshares, Inc. (NYSE:PB).
How are hedge funds trading Prosperity Bancshares, Inc. (NYSE:PB)?
At Q3’s end, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a drop of 9% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in PB over the last 5 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Ken Fisher’s Fisher Asset Management has the number one position in Prosperity Bancshares, Inc. (NYSE:PB), worth close to $41.3 million. Coming in second is Millennium Management, one of the 10 largest hedge funds in the world, holding a $12 million position. Some other hedge funds and institutional investors with similar optimism include Fred Cummings’s Elizabeth Park Capital Management, Martin Whitman’s Third Avenue Management and Cliff Asness’ AQR Capital Management. 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.