Arch Capital Group Ltd. (ACGL): Hedge Funds Are Bullish and Insiders Are Bearish, What Should You Do?

Is Arch Capital Group Ltd. (NASDAQ:ACGL) going to take off soon? Prominent investors are buying. The number of bullish hedge fund bets improved by 1 lately.

Arch Capital Group Ltd. (NASDAQ:ACGL)To most shareholders, hedge funds are assumed to be worthless, outdated investment tools of the past. While there are greater than 8000 funds with their doors open today, we hone in on the masters of this group, about 450 funds. Most estimates calculate that this group has its hands on the lion’s share of all hedge funds’ total capital, and by watching their highest performing picks, we have found a few investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 24 percentage points in 7 months (see the details here).

Equally as beneficial, bullish insider trading sentiment is another way to parse down the investments you’re interested in. Obviously, there are plenty of incentives for an insider to sell shares of his or her company, but just one, very clear reason why they would buy. Various academic studies have demonstrated the market-beating potential of this method if investors understand where to look (learn more here).

Consequently, let’s take a look at the latest action encompassing Arch Capital Group Ltd. (NASDAQ:ACGL).

What have hedge funds been doing with Arch Capital Group Ltd. (NASDAQ:ACGL)?

In preparation for this year, a total of 10 of the hedge funds we track were bullish in this stock, a change of 11% from the third quarter. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their stakes substantially.

Of the funds we track, Steadfast Capital Management, managed by Robert Pitts, holds the biggest position in Arch Capital Group Ltd. (NASDAQ:ACGL). Steadfast Capital Management has a $59.3 million position in the stock, comprising 1.6% of its 13F portfolio. Sitting at the No. 2 spot is Polar Capital, managed by Brian Ashford-Russell and Tim Woolley, which held a $40 million position; 1.9% of its 13F portfolio is allocated to the company. Other peers that hold long positions include Martin Whitman’s Third Avenue Management, Crispin Odey’s Odey Asset Management Group and D. E. Shaw’s D E Shaw.

As industrywide interest jumped, key hedge funds were leading the bulls’ herd. D E Shaw, managed by D. E. Shaw, established the largest position in Arch Capital Group Ltd. (NASDAQ:ACGL). D E Shaw had 1.3 million invested in the company at the end of the quarter. Steven Cohen’s SAC Capital Advisors also initiated a $0.4 million position during the quarter. The other funds with brand new ACGL positions are Mike Vranos’s Ellington and Ken Griffin’s Citadel Investment Group.

Insider trading activity in Arch Capital Group Ltd. (NASDAQ:ACGL)

Insider purchases made by high-level executives is most useful when the primary stock in question has experienced transactions within the past half-year. Over the latest 180-day time period, Arch Capital Group Ltd. (NASDAQ:ACGL) has experienced zero unique insiders purchasing, and 6 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Arch Capital Group Ltd. (NASDAQ:ACGL). These stocks are Cna Financial Corp (NYSE:CNA), W.R. Berkley Corporation (NYSE:WRB), Everest Re Group Ltd (NYSE:RE), Cincinnati Financial Corporation (NASDAQ:CINF), and Alleghany Corporation (NYSE:Y). This group of stocks are in the property & casualty insurance industry and their market caps are similar to ACGL’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Cna Financial Corp (NYSE:CNA) 14 0 2
W.R. Berkley Corporation (NYSE:WRB) 17 1 2
Everest Re Group Ltd (NYSE:RE) 18 0 2
Cincinnati Financial Corporation (NASDAQ:CINF) 15 1 0
Alleghany Corporation (NYSE:Y) 26 0 1

With the returns shown by our research, retail investors should always pay attention to hedge fund and insider trading activity, and Arch Capital Group Ltd. (NASDAQ:ACGL) shareholders fit into this picture quite nicely.

Click here to learn why you should track hedge funds

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Burger Kings: The 10 Most Expensive Burgers in the World

The 10 Most Ethnically Diverse Countries in the World

The 10 Most Exclusive Credit Cards in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!