Wilshire Bancorp Inc (WIBC): Hedge Funds and Insiders Are Bearish, What Should You Do?

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Wilshire Bancorp Inc (NASDAQ:WIBC) shareholders have witnessed a decrease in enthusiasm from smart money recently.

If you’d ask most investors, hedge funds are viewed as slow, old financial tools of yesteryear. While there are more than 8000 funds trading at the moment, we look at the bigwigs of this group, about 450 funds. Most estimates calculate that this group oversees the lion’s share of the smart money’s total asset base, and by paying attention to their highest performing picks, we have identified a number of investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually 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 outpaced the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Equally as beneficial, positive insider trading activity is a second way to parse down the world of equities. There are a variety of reasons for a bullish insider to drop shares of his or her company, but just one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the impressive potential of this tactic if you know where to look (learn more here).

With these “truths” under our belt, it’s important to take a glance at the latest action encompassing Wilshire Bancorp Inc (NASDAQ:WIBC).

What have hedge funds been doing with Wilshire Bancorp Inc (NASDAQ:WIBC)?

Heading into Q2, a total of 12 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 positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their holdings meaningfully.

Wilshire Bancorp Inc (NASDAQ:WIBC)When looking at the hedgies we track, Jim Simons’s Renaissance Technologies had the largest position in Wilshire Bancorp Inc (NASDAQ:WIBC), worth close to $9.9 million, comprising less than 0.1%% of its total 13F portfolio. On Renaissance Technologies’s heels is Cliff Asness of AQR Capital Management, with a $7.3 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other peers with similar optimism include Bruce Kovner’s Caxton Associates LP, Richard Driehaus’s Driehaus Capital and Ken Griffin’s Citadel Investment Group.

Seeing as Wilshire Bancorp Inc (NASDAQ:WIBC) has witnessed a declination in interest from the aggregate hedge fund industry, logic holds that there is a sect of money managers that decided to sell off their entire stakes in Q1. Intriguingly, Matthew Tewksbury’s Stevens Capital Management sold off the biggest stake of all the hedgies we monitor, valued at about $0.2 million in stock., and Mike Vranos of Ellington was right behind this move, as the fund sold off about $0.1 million worth. These moves are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

How have insiders been trading Wilshire Bancorp Inc (NASDAQ:WIBC)?

Insider purchases made by high-level executives is most useful when the company we’re looking at has seen transactions within the past 180 days. Over the latest 180-day time period, Wilshire Bancorp Inc (NASDAQ:WIBC) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Wilshire Bancorp Inc (NASDAQ:WIBC). These stocks are 1st Source Corporation (NASDAQ:SRCE), First Financial Corp (NASDAQ:THFF), Lakeland Financial Corporation (NASDAQ:LKFN), First Merchants Corporation (NASDAQ:FRME), and Taylor Capital Group Inc (NASDAQ:TAYC). All of these stocks are in the regional – midwest banks industry and their market caps are closest to WIBC’s market cap.

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