Marsh & McLennan Companies, Inc. (NYSE:MMC) has experienced an increase in hedge fund sentiment in recent months.
To most stock holders, hedge funds are viewed as underperforming, outdated financial tools of yesteryear. While there are greater than 8000 funds with their doors open today, we hone in on the elite of this club, close to 450 funds. Most estimates calculate that this group has its hands on the majority of the hedge fund industry's total asset base, and by tracking their highest performing stock picks, we have uncovered a few investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum 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 beaten the S&P 500 index by 25 percentage points in 6.5 month (see the details here).
Equally as important, bullish insider trading activity is a second way to break down the stock market universe. Just as you'd expect, there are plenty of motivations for an upper level exec to sell shares of his or her company, but only one, very obvious reason why they would behave bullishly. Plenty of academic studies have demonstrated the market-beating potential of this strategy if shareholders understand where to look (learn more here).
Keeping this in mind, it's important to take a glance at the recent action surrounding Marsh & McLennan Companies, Inc. (NYSE:MMC).
At year's end, a total of 23 of the hedge funds we track were long in this stock, a change of 44% from one quarter earlier. With hedgies' sentiment swirling, there exists an "upper tier" of key hedge fund managers who were increasing their holdings meaningfully.
When looking at the hedgies we track, Viking Global, managed by Andreas Halvorsen, holds the most valuable position in Marsh & McLennan Companies, Inc. (NYSE:MMC). Viking Global has a $54 million position in the stock, comprising 0.4% of its 13F portfolio. On Viking Global's heels is Charles de Vaulx of International Value Advisers, with a $40 million position; 1.4% of its 13F portfolio is allocated to the stock. Some other hedgies that hold long positions include Phill Gross and Robert Atchinson's Adage Capital Management, Ken Griffin's Citadel Investment Group and D. E. Shaw's D E Shaw.
Consequently, key hedge funds have jumped into Marsh & McLennan Companies, Inc. (NYSE:MMC) headfirst. Parameter Capital Management, managed by Anil Stevens and Glenn Shapiro, established the biggest position in Marsh & McLennan Companies, Inc. (NYSE:MMC). Parameter Capital Management had 5 million invested in the company at the end of the quarter. Jim Simons's Renaissance Technologies also initiated a $5 million position during the quarter. The other funds with new positions in the stock are David Costen Haley's HBK Investments, Louis Bacon's Moore Global Investments, and Ray Dalio's Bridgewater Associates.
Insider buying is particularly usable when the primary stock in question has seen transactions within the past 180 days. Over the latest half-year time period, Marsh & McLennan Companies, Inc. (NYSE:MMC) has experienced zero unique insiders purchasing, and 8 insider sales (see the details of insider trades here).
With the returns demonstrated by Insider Monkey's strategies, everyday investors should always keep an eye on hedge fund and insider trading sentiment, and Marsh & McLennan Companies, Inc. (NYSE:MMC) is an important part of this process.
Insider Monkey's small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.