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Hedge Funds Are Buying National Financial Partners Corp. (NYSE:NFP) – Erie Indemnity Company (NASDAQ:ERIE), CorVel Corporation (NASDAQ:CRVL)

Is National Financial Partners Corp. (NYSE:NFP) a good investment now? Prominent investors are in a bullish mood. The number of bullish hedge fund positions improved by 3 in recent months.

According to most shareholders, hedge funds are assumed to be underperforming, old investment tools of yesteryear. While there are greater than 8000 funds trading at present, we hone in on the masters of this group, around 450 funds. It is estimated that this group controls the majority of all hedge funds’ total capital, and by paying attention to their top equity investments, we have revealed a number of investment strategies that have historically outpaced 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 began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).

Equally as beneficial, positive insider trading sentiment is another way to break down the investments you’re interested in. Just as you’d expect, there are lots of motivations for a corporate insider to sell shares of his or her company, but only one, very clear reason why they would buy. Several empirical studies have demonstrated the valuable potential of this strategy if “monkeys” know where to look (learn more here).

Now, we’re going to take a glance at the key action encompassing National Financial Partners Corp. (NYSE:NFP).

What have hedge funds been doing with National Financial Partners Corp. (NYSE:NFP)?

At the end of the fourth quarter, a total of 15 of the hedge funds we track were long in this stock, a change of 25% from the third quarter. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their holdings substantially.

When looking at the hedgies we track, Harvest Capital Strategies, managed by Joseph A. Jolson, holds the biggest position in National Financial Partners Corp. (NYSE:NFP). Harvest Capital Strategies has a $22 million position in the stock, comprising 4% of its 13F portfolio. Coming in second is Ken Griffin of Citadel Investment Group, with a $18 million position; 0.2% of its 13F portfolio is allocated to the company. Some other hedge funds that hold long positions include Brian Taylor’s Pine River Capital Management, Jim Simons’s Renaissance Technologies and Gregg J. Powers’s Private Capital Management.

Consequently, key hedge funds have been driving this bullishness. Pine River Capital Management, managed by Brian Taylor, created the biggest position in National Financial Partners Corp. (NYSE:NFP). Pine River Capital Management had 11 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $2 million investment in the stock during the quarter. The other funds with brand new NFP positions are Phil Frohlich’s Prescott Group Capital Management and Cliff Asness’s AQR Capital Management.

How have insiders been trading National Financial Partners Corp. (NYSE:NFP)?

Insider buying is best served when the company we’re looking at has experienced transactions within the past six months. Over the last half-year time period, National Financial Partners Corp. (NYSE:NFP) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to National Financial Partners Corp. (NYSE:NFP). These stocks are Erie Indemnity Company (NASDAQ:ERIE), CNinsure Inc. (ADR) (NASDAQ:CISG), eHealth, Inc. (NASDAQ:EHTH), and CorVel Corporation (NASDAQ:CRVL). This group of stocks belong to the insurance brokers industry and their market caps are similar to NFP’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Erie Indemnity Company (NASDAQ:ERIE) 9 1 2
CNinsure Inc. (ADR) (NASDAQ:CISG) 5 0 0
eHealth, Inc. (NASDAQ:EHTH) 10 0 4
CorVel Corporation (NASDAQ:CRVL) 5 0 4

With the results exhibited by Insider Monkey’s strategies, everyday investors must always keep an eye on hedge fund and insider trading sentiment, and National Financial Partners Corp. (NYSE:NFP) is no exception.

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

Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.

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