CIGNA Corporation (NYSE:CI) investors should be aware of a decrease in support from the world’s most elite money managers in recent months.
In the eyes of most stock holders, hedge funds are viewed as underperforming, old financial tools of the past. While there are over 8000 funds in operation at the moment, we at Insider Monkey choose to focus on the top tier of this group, about 450 funds. Most estimates calculate that this group controls the majority of the hedge fund industry’s total capital, and by watching their best equity investments, we have brought to light a number of investment strategies that have historically outpaced the broader indices. 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 began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Just as beneficial, bullish insider trading activity is another way to parse down the investments you’re interested in. There are plenty of incentives for a bullish insider to downsize shares of his or her company, but only one, very simple reason why they would behave bullishly. Various academic studies have demonstrated the market-beating potential of this tactic if shareholders know where to look (learn more here).
Now, it’s important to take a gander at the recent action encompassing CIGNA Corporation (NYSE:CI).
How have hedgies been trading CIGNA Corporation (NYSE:CI)?
At year’s end, a total of 37 of the hedge funds we track held long positions in this stock, a change of -12% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their stakes meaningfully.
When looking at the hedgies we track, David Einhorn’s Greenlight Capital had the most valuable position in CIGNA Corporation (NYSE:CI), worth close to $438 million billion, accounting for 6.9% of its total 13F portfolio. Sitting at the No. 2 spot is Fir Tree, managed by Jeffrey Tannenbaum, which held a $245 million position; the fund has 6.3% of its 13F portfolio invested in the stock. Other hedgies that hold long positions include Larry Robbins’s Glenview Capital, Lee Ainslie’s Maverick Capital and Daniel S. Och’s OZ Management.
Because CIGNA Corporation (NYSE:CI) has faced bearish sentiment from the smart money, it’s safe to say that there was a specific group of money managers that decided to sell off their entire stakes heading into 2013. It’s worth mentioning that Andreas Halvorsen’s Viking Global dumped the largest investment of all the hedgies we track, totaling an estimated $50 million in stock.. Dan Loeb’s fund, Third Point, also cut its stock, about $37 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 5 funds heading into 2013.
What have insiders been doing with CIGNA Corporation (NYSE:CI)?
Bullish insider trading is best served when the company in focus has seen transactions within the past half-year. Over the latest six-month time period, CIGNA Corporation (NYSE:CI) has experienced 1 unique insiders buying, and 6 insider sales (see the details of insider trades here).
With the returns demonstrated by the aforementioned tactics, retail investors must always keep an eye on hedge fund and insider trading sentiment, and CIGNA Corporation (NYSE:CI) is an important part of this process.
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