Travelers Companies Inc (NYSE:TRV) was in 26 hedge funds’ portfolio at the end of the fourth quarter of 2012. TRV has seen a decrease in support from the world’s most elite money managers of late. There were 27 hedge funds in our database with TRV positions at the end of the previous quarter.
To most shareholders, hedge funds are viewed as underperforming, old investment vehicles of the past. While there are more than 8000 funds trading at the moment, we at Insider Monkey hone in on the leaders of this club, about 450 funds. It is estimated that this group controls the lion’s share of the hedge fund industry’s total asset base, and by paying attention to their highest performing investments, we have uncovered a number of investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outpaced 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 outclassed the S&P 500 index by 25 percentage points in 6.5 month (see the details here).
Just as integral, bullish insider trading sentiment is another way to break down the financial markets. There are plenty of incentives for a bullish insider to sell shares of his or her company, but only one, very simple reason why they would behave bullishly. Several empirical studies have demonstrated the market-beating potential of this method if you understand where to look (learn more here).
Now, let’s take a peek at the recent action regarding Travelers Companies Inc (NYSE:TRV).
What does the smart money think about Travelers Companies Inc (NYSE:TRV)?
In preparation for this year, a total of 26 of the hedge funds we track were bullish in this stock, a change of -4% from the third quarter. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their holdings substantially.
According to our comprehensive database, Southeastern Asset Management, managed by Mason Hawkins, holds the largest position in Travelers Companies Inc (NYSE:TRV). Southeastern Asset Management has a $1.171 billion position in the stock, comprising 5.1% of its 13F portfolio. The second largest stake is held by Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which held a $94 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Some other hedge funds with similar optimism include Cliff Asness’s AQR Capital Management, Ric Dillon’s Diamond Hill Capital and Ken Griffin’s Citadel Investment Group.
Judging by the fact that Travelers Companies Inc (NYSE:TRV) has faced falling interest from the aggregate hedge fund industry, we can see that there exists a select few hedge funds who sold off their full holdings heading into 2013. It’s worth mentioning that Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC dumped the largest stake of all the hedgies we key on, totaling about $88 million in stock.. Michael Messner’s fund, Seminole Capital (Investment Mgmt), also sold off its stock, about $29 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 1 funds heading into 2013.
How have insiders been trading Travelers Companies Inc (NYSE:TRV)?
Bullish insider trading is particularly usable when the primary stock in question has experienced transactions within the past six months. Over the last half-year time frame, Travelers Companies Inc (NYSE:TRV) has seen zero unique insiders purchasing, and 13 insider sales (see the details of insider trades here).
With the results shown by Insider Monkey’s time-tested strategies, retail investors should always watch hedge fund and insider trading sentiment, and Travelers Companies Inc (NYSE:TRV) is an important part of this process.
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.