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Is Old Republic International Corporation (ORI) Going to Burn These Hedge Funds?

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Old Republic International Corporation (NYSE:ORI) was in 20 hedge funds’ portfolio at the end of the first quarter of 2013. ORI shareholders have witnessed a decrease in activity from the world’s largest hedge funds recently. There were 23 hedge funds in our database with ORI positions at the end of the previous quarter.

Irving Kahn

If you’d ask most stock holders, hedge funds are perceived as underperforming, old financial tools of the past. While there are greater than 8000 funds in operation at the moment, we at Insider Monkey look at the aristocrats of this group, about 450 funds. It is widely believed that this group oversees the lion’s share of the hedge fund industry’s total asset base, and by tracking their top investments, we have formulated a number of investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outperformed 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 topped the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Just as important, positive insider trading activity is another way to parse down the financial markets. Obviously, there are a number of stimuli for an executive to downsize shares of his or her company, but just one, very clear reason why they would buy. Many empirical studies have demonstrated the useful potential of this method if investors know where to look (learn more here).

Consequently, it’s important to take a glance at the key action encompassing Old Republic International Corporation (NYSE:ORI).

How have hedgies been trading Old Republic International Corporation (NYSE:ORI)?

In preparation for this quarter, a total of 20 of the hedge funds we track were bullish in this stock, a change of -13% from the first quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their holdings substantially.

When looking at the hedgies we track, Kahn Brothers, managed by Irving Kahn, holds the largest position in Old Republic International Corporation (NYSE:ORI). Kahn Brothers has a $43.8 million position in the stock, comprising 6.5% of its 13F portfolio. Coming in second is Citadel Investment Group, managed by Ken Griffin, which held a $27.6 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Michael Blitzer’s Kingstown Capital Management, Chuck Royce’s Royce & Associates and Jim Simons’s Renaissance Technologies.

Seeing as Old Republic International Corporation (NYSE:ORI) has faced falling interest from the aggregate hedge fund industry, it’s easy to see that there was a specific group of hedge funds that elected to cut their entire stakes at the end of the first quarter. It’s worth mentioning that Matt Sirovich and Jeremy Mindich’s Scopia Capital sold off the largest stake of the 450+ funds we track, totaling an estimated $49.9 million in stock., and John Brennan of Sirios Capital Management was right behind this move, as the fund said goodbye to about $4.7 million worth. These transactions are important to note, as total hedge fund interest fell by 3 funds at the end of the first quarter.

What have insiders been doing with Old Republic International Corporation (NYSE:ORI)?

Insider trading activity, especially when it’s bullish, is best served when the company we’re looking at has experienced transactions within the past 180 days. Over the last 180-day time frame, Old Republic International Corporation (NYSE:ORI) has experienced 2 unique insiders buying, and 1 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Old Republic International Corporation (NYSE:ORI). These stocks are Triad Guaranty Inc. (PINK:TGIC), Investors Title Company (NASDAQ:ITIC), OneBeacon Insurance Group, Ltd. (NYSE:OB), Fidelity National Financial Inc (NYSE:FNF), and Assured Guaranty Ltd. (NYSE:AGO). This group of stocks are in the surety & title insurance industry and their market caps resemble ORI’s market cap.

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