Is Texas Capital Bancshares Inc (NASDAQ:TCBI) a sound investment today? Money managers are becoming less hopeful. The number of bullish hedge fund bets retreated by 1 recently.
In the eyes of most stock holders, hedge funds are viewed as slow, outdated investment vehicles of yesteryear. While there are greater than 8000 funds trading today, we choose to focus on the top tier of this group, close to 450 funds. Most estimates calculate that this group has its hands on the lion’s share of all hedge funds’ total asset base, and by tracking their top equity investments, we have uncovered a few investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a year 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 outclassed the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).
Equally as key, optimistic insider trading activity is a second way to break down the marketplace. Obviously, there are lots of motivations for an upper level exec to get rid of shares of his or her company, but only one, very clear reason why they would buy. Several academic studies have demonstrated the valuable potential of this tactic if you understand where to look (learn more here).
With these “truths” under our belt, let’s take a peek at the latest action surrounding Texas Capital Bancshares Inc (NASDAQ:TCBI).
What does the smart money think about Texas Capital Bancshares Inc (NASDAQ:TCBI)?
At year’s end, a total of 8 of the hedge funds we track were long in this stock, a change of -11% from the third quarter. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their stakes considerably.
Of the funds we track, Fisher Asset Management, managed by Ken Fisher, holds the largest position in Texas Capital Bancshares Inc (NASDAQ:TCBI). Fisher Asset Management has a $29.5 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Citadel Investment Group, managed by Ken Griffin, which held a $26.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Donald Chiboucis’s Columbus Circle Investors, Drew Cupps’s Cupps Capital Management and Neil Chriss’s Hutchin Hill Capital.
Judging by the fact that Texas Capital Bancshares Inc (NASDAQ:TCBI) has experienced bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there exists a select few funds who sold off their full holdings at the end of the year. Interestingly, Charles Anderson’s Fox Point Capital Management sold off the biggest position of the “upper crust” of funds we key on, worth an estimated $5 million in stock., and Richard Driehaus of Driehaus Capital was right behind this move, as the fund sold off about $1.1 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 1 funds at the end of the year.
What do corporate executives and insiders think about Texas Capital Bancshares Inc (NASDAQ:TCBI)?
Insider buying is best served when the company we’re looking at has experienced transactions within the past six months. Over the latest six-month time frame, Texas Capital Bancshares Inc (NASDAQ:TCBI) has seen 1 unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Texas Capital Bancshares Inc (NASDAQ:TCBI). These stocks are Commerce Bancshares, Inc. (NASDAQ:CBSH), Prosperity Bancshares, Inc. (NYSE:PB), UMB Financial Corporation (NASDAQ:UMBF), International Bancshares Corp (NASDAQ:IBOC), and First Financial Bankshares Inc (NASDAQ:FFIN). This group of stocks are the members of the regional – southwest banks industry and their market caps are similar to TCBI’s market cap.