Radian Group Inc (NYSE:RDN) was in 35 hedge funds' portfolio at the end of March. RDN has experienced an increase in hedge fund interest of late. There were 14 hedge funds in our database with RDN positions at the end of the previous quarter.
If you'd ask most market participants, hedge funds are viewed as worthless, outdated financial vehicles of yesteryear. While there are greater than 8000 funds in operation at present, we at Insider Monkey choose to focus on the leaders of this club, about 450 funds. It is estimated that this group oversees the lion's share of the smart money's total capital, and by keeping an eye on their top picks, we have formulated a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a 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 trumped the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Equally as important, optimistic insider trading activity is a second way to parse down the stock market universe. As the old adage goes: there are a number of stimuli for an insider to downsize shares of his or her company, but only one, very clear reason why they would buy. Many empirical studies have demonstrated the impressive potential of this method if investors understand what to do (learn more here).
Now, it's important to take a look at the latest action regarding Radian Group Inc (NYSE:RDN).
Heading into Q2, a total of 35 of the hedge funds we track were long in this stock, a change of 150% from the previous quarter. With hedge funds' capital changing hands, there exists an "upper tier" of noteworthy hedge fund managers who were increasing their stakes considerably.
According to our comprehensive database, John Paulson's Paulson & Co had the biggest position in Radian Group Inc (NYSE:RDN), worth close to $123.7 million, accounting for 0.7% of its total 13F portfolio. On Paulson & Co's heels is Paulson & Co, managed by John Paulson, which held a $101.8 million position; 0.6% of its 13F portfolio is allocated to the company. Some other peers that hold long positions include Israel Englander's Millennium Management, George Soros's Soros Fund Management and Ken Griffin's Citadel Investment Group.
With a general bullishness amongst the heavyweights, key money managers have been driving this bullishness. Paulson & Co, managed by John Paulson, assembled the most valuable position in Radian Group Inc (NYSE:RDN). Paulson & Co had 101.8 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also initiated a $31 million position during the quarter. The following funds were also among the new RDN investors: George Soros's Soros Fund Management, Jim Simons's Renaissance Technologies, and Robert Pohly's Samlyn Capital.
Insider buying is most useful when the company in focus has seen transactions within the past half-year. Over the latest 180-day time frame, Radian Group Inc (NYSE:RDN) has experienced 1 unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let's also take a look at hedge fund and insider activity in other stocks similar to Radian Group Inc (NYSE:RDN). These stocks are Enstar Group Ltd. (NASDAQ:ESGR), Endurance Specialty Holdings Ltd. (NYSE:ENH), MBIA Inc. (NYSE:MBI), Kemper Corporation (NYSE:KMPR), and Platinum Underwriters Holdings, Ltd. (NYSE:PTP). This group of stocks are the members of the property & casualty insurance industry and their market caps are similar to RDN's market cap.