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).
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).
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.
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|
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.