Is Loews Corporation (NYSE:L) the right pick for your portfolio? The best stock pickers are getting less bullish. The number of long hedge fund positions were cut by 5 lately.
To most shareholders, hedge funds are viewed as unimportant, old investment tools of years past. While there are greater than 8000 funds trading today, we at Insider Monkey hone in on the elite of this club, about 450 funds. It is estimated that this group has its hands on the majority of the smart money’s total capital, and by keeping an eye on their highest performing stock picks, we have uncovered 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 a year 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 outperformed the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Just as beneficial, optimistic insider trading sentiment is a second way to parse down the stock market universe. There are many incentives for a corporate insider to sell shares of his or her company, but only one, very simple reason why they would behave bullishly. Several academic studies have demonstrated the impressive potential of this tactic if you understand what to do (learn more here).
Keeping this in mind, we’re going to take a peek at the latest action encompassing Loews Corporation (NYSE:L).
Hedge fund activity in Loews Corporation (NYSE:L)
At Q1’s end, a total of 20 of the hedge funds we track held long positions in this stock, a change of -20% from the previous quarter. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were boosting their stakes considerably.
Of the funds we track, Mason Hawkins’s Southeastern Asset Management had the largest position in Loews Corporation (NYSE:L), worth close to $1.6529 billion, accounting for 7.4% of its total 13F portfolio. Coming in second is Eagle Capital Management, managed by Boykin Curry, which held a $488.4 million position; 2.9% of its 13F portfolio is allocated to the company. Other peers with similar optimism include Jim Simons’s Renaissance Technologies, Cliff Asness’s AQR Capital Management and Ken Griffin’s Citadel Investment Group.
Due to the fact that Loews Corporation (NYSE:L) has faced falling interest from the aggregate hedge fund industry, logic holds that there lies a certain “tier” of hedgies who sold off their positions entirely at the end of the first quarter. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital cut the largest stake of the “upper crust” of funds we track, comprising close to $3.6 million in stock. Murray Stahl’s fund, Horizon Asset Management, also dropped its stock, about $1.9 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 5 funds at the end of the first quarter.
How have insiders been trading Loews Corporation (NYSE:L)?
Insider trading activity, especially when it’s bullish, is at its handiest when the company we’re looking at has experienced transactions within the past 180 days. Over the latest half-year time period, Loews Corporation (NYSE:L) has experienced 1 unique insiders purchasing, and 6 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 Loews Corporation (NYSE:L). These stocks are ACE Limited (NYSE:ACE), Hartford Financial Services Group Inc (NYSE:HIG), The Allstate Corporation (NYSE:ALL), The Chubb Corporation (NYSE:CB), and The Progressive Corporation (NYSE:PGR). This group of stocks belong to the property & casualty insurance industry and their market caps resemble L’s market cap.