Fidelity National Financial Inc (NYSE:FNF) has experienced an increase in hedge fund sentiment in recent months.
To most traders, hedge funds are assumed to be worthless, old financial vehicles of yesteryear. While there are greater than 8000 funds trading at the moment, we look at the leaders of this club, around 450 funds. It is widely believed that this group has its hands on the majority of all hedge funds' total capital, and by monitoring their top stock picks, we have spotted a number of investment strategies that have historically outpaced Mr. Market. 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 outpaced the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Just as integral, bullish insider trading sentiment is a second way to parse down the world of equities. Obviously, there are a variety of reasons for an insider to get rid of shares of his or her company, but just one, very simple reason why they would buy. Various academic studies have demonstrated the valuable potential of this tactic if piggybackers understand what to do (learn more here).
Now, it's important to take a glance at the latest action surrounding Fidelity National Financial Inc (NYSE:FNF).
Heading into 2013, a total of 37 of the hedge funds we track were bullish in this stock, a change of 16% from the previous quarter. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their holdings significantly.
According to our comprehensive database, Lee Ainslie's Maverick Capital had the biggest position in Fidelity National Financial Inc (NYSE:FNF), worth close to $210.9 million, accounting for 3.1% of its total 13F portfolio. On Maverick Capital's heels is Eminence Capital, managed by Ricky Sandler, which held a $102.4 million position; 3% of its 13F portfolio is allocated to the stock. Other peers with similar optimism include Kenneth Mario Garschina's Mason Capital Management, John Paulson's Paulson & Co and Michael Kaufman's MAK Capital One.
Consequently, key hedge funds were breaking ground themselves. Paulson & Co, managed by John Paulson, initiated the biggest position in Fidelity National Financial Inc (NYSE:FNF). Paulson & Co had 58.9 million invested in the company at the end of the quarter. Jacob Doft's Highline Capital Management also made a $31 million investment in the stock during the quarter. The following funds were also among the new FNF investors: Andrew Feldstein and Stephen Siderow's Blue Mountain Capital, Donald Chiboucis's Columbus Circle Investors, and Curtis Macnguyen's Ivory Capital (Investment Mgmt).
Bullish insider trading is most useful when the company in focus has experienced transactions within the past six months. Over the last six-month time period, Fidelity National Financial Inc (NYSE:FNF) has experienced zero unique insiders purchasing, and 6 insider sales (see the details of insider trades here).
Let's go over hedge fund and insider activity in other stocks similar to Fidelity National Financial Inc (NYSE:FNF). These stocks are Triad Guaranty Inc. (PINK:TGIC), Investors Title Company (NASDAQ:ITIC), OneBeacon Insurance Group, Ltd. (NYSE:OB), Old Republic International Corporation (NYSE:ORI), and Assured Guaranty Ltd. (NYSE:AGO). This group of stocks belong to the surety & title insurance industry and their market caps resemble FNF's market cap.