A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended December 31, so let’s proceed with the discussion of the hedge fund sentiment on BankUnited, Inc. (NYSE:BKU).
BankUnited, Inc. (NYSE:BKU) shareholders have witnessed a decrease in activity from the world's largest hedge funds lately. BKU was in 21 hedge funds' portfolios at the end of December. There were 27 hedge funds in our database with BKU holdings at the end of the previous quarter. Our calculations also showed that bku isn't among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.5% through March 12, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We're going to view the fresh hedge fund action encompassing BankUnited, Inc. (NYSE:BKU).
How are hedge funds trading BankUnited, Inc. (NYSE:BKU)?
At Q4's end, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -22% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in BKU over the last 14 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists an "upper tier" of noteworthy hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Ric Dillon's Diamond Hill Capital has the most valuable position in BankUnited, Inc. (NYSE:BKU), worth close to $204.8 million, corresponding to 1.2% of its total 13F portfolio. The second most bullish fund manager is Millennium Management, led by Israel Englander, holding a $98 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that hold long positions include Ken Griffin's Citadel Investment Group, Dmitry Balyasny's Balyasny Asset Management and Jeffrey Hinkle's Shoals Capital Management.
Judging by the fact that BankUnited, Inc. (NYSE:BKU) has witnessed falling interest from the aggregate hedge fund industry, it's easy to see that there lies a certain "tier" of money managers that decided to sell off their entire stakes last quarter. Interestingly, Anton Schutz's Mendon Capital Advisors sold off the biggest position of all the hedgies tracked by Insider Monkey, comprising about $10.7 million in stock, and Emanuel J. Friedman's EJF Capital was right behind this move, as the fund dropped about $6.2 million worth. These transactions are important to note, as total hedge fund interest was cut by 6 funds last quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as BankUnited, Inc. (NYSE:BKU) but similarly valued. These stocks are Generac Holdings Inc. (NYSE:GNRC), RLI Corp. (NYSE:RLI), Dicks Sporting Goods Inc (NYSE:DKS), and Merit Medical Systems, Inc. (NASDAQ:MMSI). This group of stocks' market values are similar to BKU's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GNRC,21,111917,-3 RLI,12,142321,1 DKS,22,168865,1 MMSI,18,207217,6 Average,18.25,157580,1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.25 hedge funds with bullish positions and the average amount invested in these stocks was $158 million. That figure was $459 million in BKU's case. Dicks Sporting Goods Inc (NYSE:DKS) is the most popular stock in this table. On the other hand RLI Corp. (NYSE:RLI) is the least popular one with only 12 bullish hedge fund positions. BankUnited, Inc. (NYSE:BKU) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Hedge funds were also right about betting on BKU, though not to the same extent, as the stock returned 18.3% and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.