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 (NASDAQ:ACGL)To most shareholders, hedge funds are assumed to be worthless, outdated investment tools of the past.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 Click to see monthly returns in table format!

Lists

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies 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!