Do Hedge Funds and Insiders Love MGIC Investment Corp. (MTG)?

Page 1 of 2

Is MGIC Investment Corp. (NYSE:MTG) a bargain? Investors who are in the know are getting more optimistic. The number of bullish hedge fund bets rose by 14 recently.

If you'd ask most investors, hedge funds are seen as worthless, outdated investment vehicles of the past. While there are more than 8000 funds in operation at the moment, we look at the elite of this club, about 450 funds. It is widely believed that this group oversees the lion's share of the hedge fund industry's total asset base, and by watching their highest performing stock picks, we have unsheathed a number of investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we've started sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).

MGIC Investment Corp. (NYSE:MTG)

Just as integral, positive insider trading sentiment is another way to parse down the world of equities. There are lots of motivations for an executive to get rid of shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Many empirical studies have demonstrated the impressive potential of this method if investors know what to do (learn more here).

With all of this in mind, we're going to take a gander at the key action regarding MGIC Investment Corp. (NYSE:MTG).

What does the smart money think about MGIC Investment Corp. (NYSE:MTG)?

In preparation for this quarter, a total of 37 of the hedge funds we track held long positions in this stock, a change of 61% from one quarter earlier. With the smart money's sentiment swirling, there exists an "upper tier" of noteworthy hedge fund managers who were upping their holdings significantly.

Of the funds we track, Paulson & Co, managed by John Paulson, holds the largest position in MGIC Investment Corp. (NYSE:MTG). Paulson & Co has a $152.4 million position in the stock, comprising 0.9% of its 13F portfolio. On Paulson & Co's heels is Lee Ainslie of Maverick Capital, with a $116.7 million position; the fund has 1.5% of its 13F portfolio invested in the stock. Remaining hedge funds with similar optimism include Marc Lasry's Avenue Capital, and John Griffin's Blue Ridge Capital.

With a general bullishness amongst the heavyweights, key money managers have been driving this bullishness. Paulson & Co, managed by John Paulson, established the biggest position in MGIC Investment Corp. (NYSE:MTG). Paulson & Co had 152.4 million invested in the company at the end of the quarter. Lee Ainslie's Maverick Capital also made a $116.7 million investment in the stock during the quarter. The other funds with brand new MTG positions are Marc Lasry's Avenue Capital, and Brian Jackelow's SAB Capital Management.

What do corporate executives and insiders think about MGIC Investment Corp. (NYSE:MTG)?

Insider trading activity, especially when it's bullish, is particularly usable when the primary stock in question has experienced transactions within the past half-year. Over the latest 180-day time frame, MGIC Investment Corp. (NYSE:MTG) has seen 6 unique insiders buying, and 1 insider sales (see the details of insider trades here).

Let's also take a look at hedge fund and insider activity in other stocks similar to MGIC Investment Corp. (NYSE:MTG). These stocks are Hilltop Holdings Inc. (NYSE:HTH), Greenlight Capital Re, Ltd. (NASDAQ:GLRE), Tower Group International Ltd (NASDAQ:TWGP), Argo Group International Holdings, Ltd. (NASDAQ:AGII), and FBL Financial Group (NYSE:FFG). This group of stocks are in the property & casualty insurance industry and their market caps are similar to MTG's market cap.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 30 percentage points in 13 months Learn how!

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!