Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Should You Avoid SVB Financial Group (SIVB)?

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the second quarter. You can find write-ups about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves and analyze what the smart money thinks of SVB Financial Group (NASDAQ:SIVB) based on that data.

SVB Financial Group (NASDAQ:SIVB) investors should pay attention to a decrease in support from the world’s most elite money managers recently. SIVB was in 26 hedge funds’ portfolios at the end of June. There were 29 hedge funds in our database with SIVB holdings at the end of the previous quarter. Our calculations also showed that SIVB isn’t among the 30 most popular stocks among hedge funds (view the video below).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

To the average investor there are plenty of gauges stock traders have at their disposal to size up their holdings. Two of the most useful gauges are hedge fund and insider trading activity. We have shown that, historically, those who follow the best picks of the best investment managers can outclass the S&P 500 by a solid margin (see the details here).

Matthew Hulsizer PEAK6 Capital

Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s take a peek at the recent hedge fund action encompassing SVB Financial Group (NASDAQ:SIVB).

Hedge fund activity in SVB Financial Group (NASDAQ:SIVB)

Heading into the third quarter of 2019, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a change of -10% from one quarter earlier. On the other hand, there were a total of 37 hedge funds with a bullish position in SIVB a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

SIVB_oct2019

Among these funds, Fisher Asset Management held the most valuable stake in SVB Financial Group (NASDAQ:SIVB), which was worth $228.4 million at the end of the second quarter. On the second spot was Diamond Hill Capital which amassed $53 million worth of shares. Moreover, Two Sigma Advisors, AQR Capital Management, and Gillson Capital were also bullish on SVB Financial Group (NASDAQ:SIVB), allocating a large percentage of their portfolios to this stock.

Since SVB Financial Group (NASDAQ:SIVB) has experienced falling interest from hedge fund managers, logic holds that there were a few hedge funds who were dropping their entire stakes heading into Q3. Intriguingly, Dmitry Balyasny’s Balyasny Asset Management said goodbye to the biggest position of all the hedgies followed by Insider Monkey, totaling about $1.6 million in stock, and Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital was right behind this move, as the fund dropped about $1 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 3 funds heading into Q3.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as SVB Financial Group (NASDAQ:SIVB) but similarly valued. These stocks are Burlington Stores Inc (NYSE:BURL), Domino’s Pizza, Inc. (NYSE:DPZ), The AES Corporation (NYSE:AES), and TechnipFMC plc (NYSE:FTI). All of these stocks’ market caps are closest to SIVB’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BURL 31 1536898 0
DPZ 27 1763092 -5
AES 27 503849 3
FTI 25 863411 0
Average 27.5 1166813 -0.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 27.5 hedge funds with bullish positions and the average amount invested in these stocks was $1167 million. That figure was $484 million in SIVB’s case. Burlington Stores Inc (NYSE:BURL) is the most popular stock in this table. On the other hand TechnipFMC plc (NYSE:FTI) is the least popular one with only 25 bullish hedge fund positions. SVB Financial Group (NASDAQ:SIVB) 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately SIVB wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); SIVB investors were disappointed as the stock returned -7% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far in 2019.

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

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.