MainSource Financial Group Inc. (MSFG): Are Hedge Funds Right About This Stock?

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MainSource Financial Group Inc. (NASDAQ:MSFG) shareholders have witnessed a decrease in activity from the world’s largest hedge funds lately.

According to most stock holders, hedge funds are viewed as unimportant, old financial tools of the past. While there are more than 8000 funds in operation at the moment, we choose to focus on the leaders of this club, about 450 funds. It is widely believed that this group oversees the lion’s share of the hedge fund industry’s total asset base, and by paying attention to their best picks, we have identified a few investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Equally as integral, bullish insider trading activity is another way to break down the stock market universe. Obviously, there are a number of stimuli for an upper level exec to drop shares of his or her company, but only one, very obvious reason why they would buy. Many academic studies have demonstrated the impressive potential of this tactic if investors know where to look (learn more here).

With all of this in mind, it’s important to take a peek at the latest action surrounding MainSource Financial Group Inc. (NASDAQ:MSFG).

What have hedge funds been doing with MainSource Financial Group Inc. (NASDAQ:MSFG)?

At the end of the first quarter, a total of 5 of the hedge funds we track held long positions in this stock, a change of 0% from the previous quarter. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were upping their holdings considerably.

MainSource Financial Group Inc. (MSFG)According to our comprehensive database, Jim Simons’s Renaissance Technologies had the largest position in MainSource Financial Group Inc. (NASDAQ:MSFG), worth close to $1.7 million, accounting for less than 0.1%% of its total 13F portfolio. The second largest stake is held by Whitebox Advisors, managed by Andy Redleaf, which held a $0.5 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other peers with similar optimism include Israel Englander’s Millennium Management, John Overdeck and David Siegel’s Two Sigma Advisors and D. E. Shaw’s D E Shaw.

Due to the fact that MainSource Financial Group Inc. (NASDAQ:MSFG) has witnessed bearish sentiment from hedge fund managers, it’s safe to say that there exists a select few fund managers who were dropping their full holdings at the end of the first quarter. It’s worth mentioning that Peter Rathjens Bruce Clarke and John Campbell’s Arrowstreet Capital said goodbye to the largest investment of the 450+ funds we key on, worth close to $0.2 million in stock. These bearish behaviors are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

How are insiders trading MainSource Financial Group Inc. (NASDAQ:MSFG)?

Insider purchases made by high-level executives is particularly usable when the company in focus has seen transactions within the past half-year. Over the last half-year time frame, MainSource Financial Group Inc. (NASDAQ:MSFG) has experienced 3 unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to MainSource Financial Group Inc. (NASDAQ:MSFG). These stocks are Lakeland Financial Corporation (NASDAQ:LKFN), First Financial Corp (NASDAQ:THFF), First Busey Corporation (NASDAQ:BUSE), Peoples Bancorp Inc. (NASDAQ:PEBO), and German American Bancorp., Inc. (NASDAQ:GABC). This group of stocks are the members of the regional – midwest banks industry and their market caps match MSFG’s market cap.

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