We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Ackman’s recent Valeant losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards HCC Insurance Holdings, Inc. (NYSE:HCC).
HCC Insurance Holdings, Inc. (NYSE:HCC) has experienced an increase in hedge fund interest of late. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Willis Group Holdings PLC (NYSE:WSH), News Corp (NASDAQ:NWSA), and AGL Resources Inc. (NYSE:GAS) to gather more data points.
Today there are a lot of gauges market participants use to analyze stocks. Some of the less utilized gauges are hedge fund and insider trading moves. We have shown that, historically, those who follow the top picks of the elite money managers can beat the market by a solid amount (see the details here).
With all of this in mind, we’re going to take a glance at the key action regarding HCC Insurance Holdings, Inc. (NYSE:HCC).
What have hedge funds been doing with HCC Insurance Holdings, Inc. (NYSE:HCC)?
At Q3’s end, a total of 30 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 7% from the second quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Robert Emil Zoellner’s Alpine Associates has the biggest position in HCC Insurance Holdings, Inc. (NYSE:HCC), worth close to $155.3 million, amounting to 6.1% of its total 13F portfolio. Coming in second is Clint Carlson of Carlson Capital, with an $119.8 million position; 1.4% of its 13F portfolio is allocated to the stock. Other peers with similar optimism consist of Alec Litowitz and Ross Laser’s Magnetar Capital, Phill Gross and Robert Atchinson’s Adage Capital Management and Paul Glazer’s Glazer Capital.