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Is Heritage Financial Corporation (HFWA) A Good Stock To Buy?

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Nina Todic
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The government requires hedge funds and wealthy investors that crossed the $100 million equity holdings threshold are required to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on December 31. We at Insider Monkey have made an extensive database of nearly 750 of those elite funds and prominent investors' filings. In this article, we analyze how these elite funds and prominent investors traded Heritage Financial Corporation (NASDAQ:HFWA) based on those filings.

Heritage Financial Corporation (NASDAQ:HFWA) has seen an increase in support from the world's most elite money managers of late. Our calculations also showed that hfwa isn't among the 30 most popular stocks among hedge funds.

In the financial world there are numerous tools stock market investors use to size up their stock investments. Some of the best tools are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the best picks of the top fund managers can trounce the broader indices by a superb margin (see the details here).

AlphaOne Capital Partners' Returns, AUM and Holdings
AlphaOne Capital Partners' Returns, AUM and Holdings

We're going to check out the new hedge fund action surrounding Heritage Financial Corporation (NASDAQ:HFWA).

How have hedgies been trading Heritage Financial Corporation (NASDAQ:HFWA)?

At Q4's end, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 33% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards HFWA over the last 14 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds with HFWA Positions
No of Hedge Funds with HFWA Positions

According to Insider Monkey's hedge fund database, Amy Minella's Cardinal Capital has the biggest position in Heritage Financial Corporation (NASDAQ:HFWA), worth close to $29.4 million, corresponding to 1.1% of its total 13F portfolio. The second largest stake is held by Forest Hill Capital, managed by Mark Lee, which holds a $9.8 million position; the fund has 3.1% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions consist of Matthew Lindenbaum's Basswood Capital, Israel Englander's Millennium Management and Paul Hondros's AlphaOne Capital Partners.

Now, specific money managers were leading the bulls' herd. Balyasny Asset Management, managed by Dmitry Balyasny, created the largest position in Heritage Financial Corporation (NASDAQ:HFWA). Balyasny Asset Management had $0.9 million invested in the company at the end of the quarter. Brandon Haley's Holocene Advisors also initiated a $0.3 million position during the quarter.

Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Heritage Financial Corporation (NASDAQ:HFWA) but similarly valued. We will take a look at Houghton Mifflin Harcourt Co (NASDAQ:HMHC), Evoqua Water Technologies Corp. (NYSE:AQUA), James River Group Holdings Ltd (NASDAQ:JRVR), and CBIZ, Inc. (NYSE:CBZ). This group of stocks' market values match HFWA's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position HMHC,19,283998,6 AQUA,12,82604,1 JRVR,10,37026,2 CBZ,12,146494,-3 Average,13.25,137531,1.5 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.25 hedge funds with bullish positions and the average amount invested in these stocks was $138 million. That figure was $58 million in HFWA's case. Houghton Mifflin Harcourt Co (NASDAQ:HMHC) is the most popular stock in this table. On the other hand James River Group Holdings Ltd (NASDAQ:JRVR) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Heritage Financial Corporation (NASDAQ:HFWA) is even less popular than JRVR. Hedge funds dodged a bullet by taking a bearish stance towards HFWA. Our calculations showed that the top 15 most popular hedge fund stocks returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately HFWA wasn't nearly as popular as these 15 stock (hedge fund sentiment was very bearish); HFWA investors were disappointed as the stock returned 2.4% 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.

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