U.S. Bancorp (USB): Hedge Funds are Bearish, Should You Be?

U.S. Bancorp (NYSE:USB) has settled a lawsuit with Freddie Mac for about $53 million, a settlement pertaining to some bad mortgage loans to Freddie Mac during the period 2000 to 2008. The settlement will cover all outstanding and potential repurchase claims and will be paid from the bank’s current reserves. Several banks have settled the claims with Freddie Mac. The multi-state financial services holding company provides a range of financial services like lending and depository services, foreign exchange, cash management, trust and investment management services. US Bancorp is also engaged in insurance, brokerage, credit card services, mortgage banking, and leasing merchant and automated teller machine (ATM) processing services.

U.S. Bancorp (NYSE:USB) investors should be aware of a decrease in hedge-fund sentiment recently

U.S.-Bancorp

What have hedge funds been doing with U.S. Bancorp (NYSE:USB)?

U.S. Bancorp (NYSE:USB) was in 43 hedge-fund portfolios at the end of the third quarter, compared to 48 at the end of the second quarter, a 10-percent decrease from one quarter earlier.

When looking at the hedgies followed by Insider Monkey, Warren Buffett’s Berkshire Hathaway had the largest position in U.S. Bancorp (NYSE:USB), worth close to $2.89 billion, accounting for 3.1 percent of its total 13F portfolio. On Berkshire Hathaway’s heels is Yacktman Asset Management, led by Donald Yacktman, holding a $464.5-million position; the fund has 2.1 percent of its 13F portfolio invested in the stock. Remaining hedgies with similar optimism encompass Jean-Marie Eveillard’s First Eagle Investment Management, Ken Griffin’s Citadel Investment Group and Lou Simpson’s SQ Advisors.

Since U.S. Bancorp (NYSE:USB) has experienced falling interest from hedge fund managers, it’s easy to see that there were a few money managers that slashed their positions entirely last quarter. Interestingly, Clint Carlson’s Carlson Capital dumped the biggest investment of the “upper crust” of funds monitored by Insider Monkey, worth close to $60.9 million in stock, and Jim Simons of Renaissance Technologies was right behind this move, as the fund sold off about $31.1-million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by five funds last quarter.

How are insiders trading U.S. Bancorp (NYSE:USB)?

In keeping with the bearish sentiments of the hedgies, insiders have also dumped the stocks. U.S. Bancorp (NYSE:USB) has experienced one unique insider purchase and 18 insider sales (see the details of insider trades here).

Let’s also review hedge-fund and insider activity in other stocks similar to U.S. Bancorp (NYSE:USB). These stocks are Associated Banc Corp (NASDAQ:ASBC)TFS Financial Corporation (NASDAQ:TFSL)Huntington Bancshares Incorporated (NASDAQ:HBAN)Comerica Incorporated (NYSE:CMA), and Fifth Third Bancorp (NASDAQ:FITB). These groups of stocks are in the regional banks industry and their market caps resemble USB’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Associated Banc Corp (NASDAQ:ASBC) 14 1 5
TFS Financial Corporation (NASDAQ:TFSL) 20 0 3
Huntington Bancshares Incorporated (NASDAQ:HBAN) 20 1 2
Comerica Incorporated (NYSE:CMA) 25 0 3
Fifth Third Bancorp (NASDAQ:FITB) 32 0 1

In spite of bearish sentiments by hedgies and insiders, U.S. Bancorp (NYSE:USB) is still the favorite among the peer group with Fifth Third Bancorp (NASDAQ:FITB) in the second place in finding favor of the hedgies.


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