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Is Aon PLC (AON) Going to Burn These Hedge Funds?

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Aon PLC (NYSE:AON) has witnessed a slight increase in sentiment from the smart money of late.

Now, according to many traders, hedge funds are perceived as overrated, outdated investment vehicles of an era lost to time. Although there are more than 8,000 hedge funds in operation today, this site looks at the elite of this group, about 525 funds. It is assumed that this group oversees most of the hedge fund industry’s total capital, and by watching their highest quality stock picks, we’ve figured out a number of investment strategies that have historically outpaced the S&P 500. Our small-cap hedge fund strategy beat 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 33 percentage points in 11 months (explore the details and some picks here).

Equally as crucial, bullish insider trading sentiment is a second way to look at the marketplace. As the old adage goes: there are a variety of motivations for an executive to get rid of shares of his or her company, but only one, very simple reason why they would initiate a purchase. Various empirical studies have demonstrated the useful potential of this strategy if piggybackers understand what to do (learn more here).

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What’s more, it’s important to study the recent info about Aon PLC (NYSE:AON).

Hedge fund activity in Aon PLC (NYSE:AON)

In preparation for the third quarter, a total of 32 of the hedge funds we track were bullish in this stock, a change of 3% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy fund managers who were increasing their holdings significantly.

Out of the funds we follow, Mason Hawkins’s Southeastern Asset Management had the most valuable position in Aon PLC (NYSE:AON), worth close to $1.2163 billion, accounting for 6% of its total 13F portfolio. Coming in second is Eagle Capital Management, managed by Boykin Curry, which held a $1.013 billion position; 5.4% of its 13F portfolio is allocated to the stock. Other hedge funds that are bullish include Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC, Jeffrey Tannenbaum’s Fir Tree and Larry Robbins’s Glenview Capital.

Now, specific money managers were breaking ground themselves. Southeastern Asset Management, managed by Mason Hawkins, established the most outsized position in Aon PLC (NYSE:AON). Southeastern Asset Management had 1.2163 billion invested in the company at the end of the quarter. Boykin Curry’s Eagle Capital Management also initiated a $1.013 billion position during the quarter. The other funds with brand new AON positions are Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC, Jeffrey Tannenbaum’s Fir Tree, and Larry Robbins’s Glenview Capital.

How are insiders trading Aon PLC (NYSE:AON)?

Insider buying is best served when the company we’re looking at has seen transactions within the past six months. Over the latest 180-day time period, Aon PLC (NYSE:AON) has seen 1 unique insiders purchasing, and 7 insider sales (see the details of insider trades here).

We’ll also examine the relationship between both of these indicators in other stocks similar to Aon PLC (NYSE:AON). These stocks are Erie Indemnity Company (NASDAQ:ERIE), Brown & Brown, Inc. (NYSE:BRO), Arthur J. Gallagher & Co. (NYSE:AJG), Willis Group Holdings PLC (NYSE:WSH), and Marsh & McLennan Companies, Inc. (NYSE:MMC). All of these stocks are in the insurance brokers industry and their market caps match AON’s market cap.

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