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Do Hedge Funds and Insiders Love ProAssurance Corporation (NYSE:PRA)?

Is ProAssurance Corporation (NYSE:PRA) ready to raly soon? The best stock pickers are in an optimistic mood. The number of long hedge fund bets rose by 3 lately.

ProAssurance Corporation (NYSE:PRA)

If you’d ask most shareholders, hedge funds are seen as underperforming, old investment vehicles of years past. While there are over 8000 funds in operation at the moment, we choose to focus on the top tier of this group, about 450 funds. Most estimates calculate that this group controls the lion’s share of the smart money’s total capital, and by paying attention to their highest performing investments, we have formulated a few investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum 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 topped the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).

Just as beneficial, positive insider trading activity is another way to parse down the world of equities. There are a number of stimuli for an upper level exec to sell shares of his or her company, but only one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the useful potential of this method if piggybackers understand where to look (learn more here).

Consequently, we’re going to take a gander at the recent action encompassing ProAssurance Corporation (NYSE:PRA).

How are hedge funds trading ProAssurance Corporation (NYSE:PRA)?

At year’s end, a total of 19 of the hedge funds we track were bullish in this stock, a change of 19% from one quarter earlier. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were increasing their stakes considerably.

According to our comprehensive database, Chuck Royce’s Royce & Associates had the biggest position in ProAssurance Corporation (NYSE:PRA), worth close to $75 million, comprising 0.2% of its total 13F portfolio. Coming in second is Ken Gray and Steve Walsh of Bryn Mawr Capital, with a $45 million position; the fund has 3.8% of its 13F portfolio invested in the stock. Some other hedge funds with similar optimism include Steven Cohen’s SAC Capital Advisors, SAC Subsidiary’s CR Intrinsic Investors and Brian Ashford-Russell and Tim Woolley’s Polar Capital.

Now, key hedge funds have been driving this bullishness. Highbridge Capital Management, managed by Glenn Russell Dubin, assembled the most valuable position in ProAssurance Corporation (NYSE:PRA). Highbridge Capital Management had 2 million invested in the company at the end of the quarter. Phil Frohlich’s Prescott Group Capital Management also made a $1 million investment in the stock during the quarter. The other funds with brand new PRA positions are Mike Vranos’s Ellington, Phill Gross and Robert Atchinson’s Adage Capital Management, and David Harding’s Winton Capital Management.

How are insiders trading ProAssurance Corporation (NYSE:PRA)?

Insider purchases made by high-level executives is particularly usable when the primary stock in question has experienced transactions within the past six months. Over the latest half-year time frame, ProAssurance Corporation (NYSE:PRA) has experienced zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

With the returns shown by our research, everyday investors should always watch hedge fund and insider trading activity, and ProAssurance Corporation (NYSE:PRA) is no exception.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.

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