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Here’s What Hedge Funds Think About Sterling Bancorp (STL)

Nina Todic

Insider Monkey has processed numerous 13F filings of hedge funds and successful 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 first 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 Sterling Bancorp (NYSE:STL) based on that data.

Is Sterling Bancorp (NYSE:STL) a healthy stock for your portfolio? Prominent investors are turning bullish. The number of long hedge fund bets improved by 1 lately. Our calculations also showed that stl 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 40 percentage points since May 2014 through May 30, 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 30.9% through May 30, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Ken Griffin CITADEL INVESTMENT GROUP

We're going to review the latest hedge fund action encompassing Sterling Bancorp (NYSE:STL).

What have hedge funds been doing with Sterling Bancorp (NYSE:STL)?

At the end of the first quarter, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6% from one quarter earlier. By comparison, 17 hedge funds held shares or bullish call options in STL 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.

No of Hedge Funds with STL Positions

Among these funds, Citadel Investment Group held the most valuable stake in Sterling Bancorp (NYSE:STL), which was worth $139.7 million at the end of the first quarter. On the second spot was Diamond Hill Capital which amassed $60 million worth of shares. Moreover, Millennium Management, EJF Capital, and Azora Capital were also bullish on Sterling Bancorp (NYSE:STL), allocating a large percentage of their portfolios to this stock.

With a general bullishness amongst the heavyweights, key money managers have been driving this bullishness. Element Capital Management, managed by Jeffrey Talpins, initiated the most outsized position in Sterling Bancorp (NYSE:STL). Element Capital Management had $0.6 million invested in the company at the end of the quarter. Michael Platt and William Reeves's BlueCrest Capital Mgmt. also initiated a $0.5 million position during the quarter. The other funds with new positions in the stock are Joel Greenblatt's Gotham Asset Management and Andrew Feldstein and Stephen Siderow's Blue Mountain Capital.

Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Sterling Bancorp (NYSE:STL) but similarly valued. We will take a look at United States Cellular Corporation (NYSE:USM), Wright Medical Group N.V. (NASDAQ:WMGI), Amedisys Inc (NASDAQ:AMED), and IBERIABANK Corporation (NASDAQ:IBKC). This group of stocks' market values resemble STL's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position USM,14,183392,-3 WMGI,35,889529,2 AMED,26,295842,-6 IBKC,26,194750,2 Average,25.25,390878,-1.25 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 25.25 hedge funds with bullish positions and the average amount invested in these stocks was $391 million. That figure was $469 million in STL's case. Wright Medical Group N.V. (NASDAQ:WMGI) is the most popular stock in this table. On the other hand United States Cellular Corporation (NYSE:USM) is the least popular one with only 14 bullish hedge fund positions. Sterling Bancorp (NYSE:STL) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. A small number of hedge funds were also right about betting on STL as the stock returned 6.3% during the same time frame and outperformed the market by an even larger margin.

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

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