The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their December 31 holdings, data that is available nowhere else. Should you consider Columbia Banking System Inc (NASDAQ:COLB) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
Columbia Banking System Inc (NASDAQ:COLB) has experienced a decrease in hedge fund sentiment in recent months. Our calculations also showed that colb 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.
Let's view the recent hedge fund action encompassing Columbia Banking System Inc (NASDAQ:COLB).
How are hedge funds trading Columbia Banking System Inc (NASDAQ:COLB)?
At Q4's end, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of -9% from one quarter earlier. On the other hand, there were a total of 12 hedge funds with a bullish position in COLB a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
More specifically, Cardinal Capital was the largest shareholder of Columbia Banking System Inc (NASDAQ:COLB), with a stake worth $105.4 million reported as of the end of December. Trailing Cardinal Capital was Citadel Investment Group, which amassed a stake valued at $8.2 million. Balyasny Asset Management, AlphaOne Capital Partners, and Renaissance Technologies were also very fond of the stock, giving the stock large weights in their portfolios.
Seeing as Columbia Banking System Inc (NASDAQ:COLB) has experienced declining sentiment from the aggregate hedge fund industry, it's safe to say that there were a few hedge funds that decided to sell off their positions entirely by the end of the third quarter. Interestingly, D. E. Shaw's D E Shaw dumped the largest stake of all the hedgies watched by Insider Monkey, comprising close to $1.3 million in stock. Cliff Asness's fund, AQR Capital Management, also sold off its stock, about $1.2 million worth. These transactions are important to note, as total hedge fund interest was cut by 1 funds by the end of the third quarter.
Let's also examine hedge fund activity in other stocks similar to Columbia Banking System Inc (NASDAQ:COLB). These stocks are AMN Healthcare Services Inc (NYSE:AMN), Ormat Technologies, Inc. (NYSE:ORA), Guangshen Railway Co. Ltd (NYSE:GSH), and Steven Madden, Ltd. (NASDAQ:SHOO). This group of stocks' market values resemble COLB's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AMN,15,48895,0 ORA,5,149251,-2 GSH,1,3837,0 SHOO,18,63767,3 Average,9.75,66438,0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.75 hedge funds with bullish positions and the average amount invested in these stocks was $66 million. That figure was $133 million in COLB's case. Steven Madden, Ltd. (NASDAQ:SHOO) is the most popular stock in this table. On the other hand Guangshen Railway Co. Ltd (NYSE:GSH) is the least popular one with only 1 bullish hedge fund positions. Columbia Banking System Inc (NASDAQ:COLB) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. 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. Unfortunately COLB wasn't nearly as popular as these 15 stock and hedge funds that were betting on COLB were disappointed as the stock returned -4.3% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.