Stewart Information Services Corp (NYSE:STC) was in 14 hedge funds’ portfolio at the end of the first quarter of 2013. STC has seen a decrease in support from the world’s most elite money managers lately. There were 19 hedge funds in our database with STC positions at the end of the previous quarter.
If you’d ask most shareholders, hedge funds are seen as worthless, old financial vehicles of years past. While there are greater than 8000 funds in operation at the moment, we choose to focus on the crème de la crème of this group, about 450 funds. It is widely believed that this group controls the lion’s share of all hedge funds’ total capital, and by watching their top stock picks, we have figured out a number of investment strategies that have historically beaten the 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 outclassed the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
Just as important, positive insider trading activity is a second way to break down the financial markets. There are a variety of incentives for a corporate insider to cut shares of his or her company, but just one, very clear reason why they would initiate a purchase. Various academic studies have demonstrated the valuable potential of this strategy if “monkeys” know where to look (learn more here).
With all of this in mind, we’re going to take a look at the latest action encompassing Stewart Information Services Corp (NYSE:STC).
How are hedge funds trading Stewart Information Services Corp (NYSE:STC)?
In preparation for this quarter, a total of 14 of the hedge funds we track held long positions in this stock, a change of -26% from the first quarter. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings meaningfully.
According to our comprehensive database, Hirzel Capital Management, managed by Zac Hirzel, holds the largest position in Stewart Information Services Corp (NYSE:STC). Hirzel Capital Management has a $19.8 million position in the stock, comprising 6.9% of its 13F portfolio. Coming in second is Citadel Investment Group, managed by Ken Griffin, which held a $10.5 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions include Andy Redleaf’s Whitebox Advisors, Geoffrey Raynor’s Q Investments (Specter Holdings) and Phil Frohlich’s Prescott Group Capital Management.
Because Stewart Information Services Corp (NYSE:STC) has faced declining sentiment from hedge fund managers, we can see that there was a specific group of hedge funds that slashed their full holdings in Q1. Interestingly, Jim Simons’s Renaissance Technologies dumped the largest investment of the “upper crust” of funds we watch, valued at an estimated $3.4 million in stock., and Donald Chiboucis of Columbus Circle Investors was right behind this move, as the fund dumped about $2.6 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 5 funds in Q1.
Insider trading activity in Stewart Information Services Corp (NYSE:STC)
Insider buying is particularly usable when the company in question has seen transactions within the past half-year. Over the latest six-month time frame, Stewart Information Services Corp (NYSE:STC) has experienced zero unique insiders buying, and 2 insider sales (see the details of insider trades here).
With the returns shown by the aforementioned research, retail investors should always pay attention to hedge fund and insider trading activity, and Stewart Information Services Corp (NYSE:STC) is no exception.