American International Group Inc (NYSE:AIG) was in 142 hedge funds' portfolio at the end of December. AIG has seen an increase in hedge fund interest lately. There were 121 hedge funds in our database with AIG holdings at the end of the previous quarter.
If you'd ask most traders, hedge funds are perceived as slow, outdated financial vehicles of yesteryear. While there are over 8000 funds trading at the moment, we at Insider Monkey hone in on the aristocrats of this group, around 450 funds. It is estimated that this group controls the lion's share of the hedge fund industry's total asset base, and by monitoring their top stock picks, we have deciphered a number of investment strategies that have historically outperformed 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 outclassed the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).
Equally as key, bullish insider trading activity is another way to break down the financial markets. There are a number of motivations for an insider to get rid of shares of his or her company, but only one, very clear reason why they would buy. Several academic studies have demonstrated the valuable potential of this strategy if piggybackers know what to do (learn more here).
Consequently, we're going to take a peek at the latest action surrounding American International Group Inc (NYSE:AIG).
At the end of the fourth quarter, a total of 142 of the hedge funds we track held long positions in this stock, a change of 17% from the third quarter. With hedgies' positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their holdings significantly.
Of the funds we track, Bruce Berkowitz's Fairholme (FAIRX) had the largest position in American International Group Inc (NYSE:AIG), worth close to $3.031 billion, comprising 43.6% of its total 13F portfolio. Sitting at the No. 2 spot is William B. Gray of Orbis Investment Management, with a $714 million position; 7.1% of its 13F portfolio is allocated to the stock. Remaining hedgies with similar optimism include Dan Loeb's Third Point, Daniel S. Och's OZ Management and Richard Perry's Perry Capital.
As aggregate interest increased, specific money managers have been driving this bullishness. Orbis Investment Management, managed by William B. Gray, initiated the largest position in American International Group Inc (NYSE:AIG). Orbis Investment Management had 714 million invested in the company at the end of the quarter. Seth Klarman's Baupost Group also made a $247 million investment in the stock during the quarter. The other funds with brand new AIG positions are Stephen Mandel's Lone Pine Capital, Jonathon Jacobson's Highfields Capital Management, and Alan Fournier's Pennant Capital Management.
Insider trading activity, especially when it's bullish, is most useful when the company in focus has experienced transactions within the past half-year. Over the last 180-day time period, American International Group Inc (NYSE:AIG) has experienced zero unique insiders buying, and 1 insider sales (see the details of insider trades here).
With the returns demonstrated by Insider Monkey's strategies, retail investors must always keep an eye on hedge fund and insider trading activity, and American International Group Inc (NYSE:AIG) shareholders fit into this picture quite nicely.
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