What's a smart ProAssurance Corporation (NYSE:PRA) to do?
In the eyes of many of your fellow readers, hedge funds are assumed to be useless, old investment tools of a period lost to current times. Although there are In excess of 8,000 hedge funds trading in present day, this site focuses on the leaders of this group, close to 525 funds. It is widely held that this group has its hands on most of the smart money's total assets, and by tracking their best equity investments, we've deciphered a few investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually 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 topped the S&P 500 index by 33 percentage points in 11 months (find the details here).
Just as necessary, bullish insider trading activity is another way to analyze the marketplace. There are a variety of incentives for a bullish insider to cut shares of his or her company, but only one, very obvious reason why they would buy. Many empirical studies have demonstrated the useful potential of this method if piggybackers understand what to do (learn more here).
What's more, we're going to analyze the newest info about ProAssurance Corporation (NYSE:PRA).
Heading into Q3, a total of 15 of the hedge funds we track were long in this stock, a change of -21% from the first quarter. With hedge funds' positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes substantially.
When using filings from the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the most valuable position in ProAssurance Corporation (NYSE:PRA). Royce & Associates has a $47.7 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Ken Griffin of Citadel Investment Group, with a $31.5 million position; 0.1% of its 13F portfolio is allocated to the company. Other hedge funds with similar optimism include Brian Ashford-Russell and Tim Woolley's Polar Capital, Steven Cohen's SAC Capital Advisors and D. E. Shaw's D E Shaw.
Due to the fact ProAssurance Corporation (NYSE:PRA) has witnessed declining interest from upper-tier hedge fund managers, it's safe to say that there lies a certain "tier" of money managers that slashed their full holdings last quarter. Interestingly, David Costen Haley's HBK Investments said goodbye to the largest investment of all the hedgies we watch, comprising about $1.1 million in stock, and John Overdeck and David Siegel of Two Sigma Advisors was right behind this move, as the fund sold off about $1 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 4 funds last quarter.
Bullish insider trading is particularly usable when the primary stock in question has seen transactions within the past six months. Over the latest six-month time frame, ProAssurance Corporation (NYSE:PRA) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We'll also review the relationship between both of these indicators in other stocks similar to ProAssurance Corporation (NYSE:PRA). These stocks are Corelogic Inc (NYSE:CLGX), Allied World Assurance Co Holdings, AG. (NYSE:AWH), Aspen Insurance Holdings Limited (NYSE:AHL), First American Financial Corp (NYSE:FAF), and Alterra Capital Holdings Ltd (NASDAQ:ALTE). All of these stocks are in the property & casualty insurance industry and their market caps resemble PRA's market cap.