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Is Primerica, Inc. (PRI) Going to Burn These Hedge Funds?

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Is Primerica, Inc. (NYSE:PRI) a good investment?

If you were to ask many market players, hedge funds are assumed to be bloated, old investment tools of a forgotten age. Although there are over 8,000 hedge funds with their doors open in present day, Insider Monkey looks at the aristocrats of this group, around 525 funds. It is assumed that this group controls the majority of the hedge fund industry’s total assets, and by paying attention to their best stock picks, we’ve unearthed a few investment strategies that have historically beaten the S&P 500. Our small-cap hedge fund strategy beat 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 beaten the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).

Just as useful, positive insider trading sentiment is another way to look at the investments you’re interested in. Just as you’d expect, there are plenty of reasons for an upper level exec to downsize shares of his or her company, but just one, very obvious reason why they would behave bullishly. Many academic studies have demonstrated the market-beating potential of this tactic if shareholders understand where to look (learn more here).

Thus, we’re going to analyze the recent info for Primerica, Inc. (NYSE:PRI).

What does the smart money think about Primerica, Inc. (NYSE:PRI)?

Heading into Q3, a total of 13 of the hedge funds we track were bullish in this stock, a change of 8% from one quarter earlier. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were increasing their stakes significantly.

Primerica, Inc. (NYSE:PRI)When using filings from the hedgies we track, Glenn Greenberg’s Brave Warrior Capital had the most valuable position in Primerica, Inc. (NYSE:PRI), worth close to $124.9 million, comprising 5.8% of its total 13F portfolio. Coming in second is D. E. Shaw of D E Shaw, with a $36.3 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedgies that hold long positions include Richard S. Pzena’s Pzena Investment Management, Anthony Bozza’s Lakewood Capital Management and Ken Griffin’s Citadel Investment Group.

Consequently, certain money managers have jumped into Primerica, Inc. (NYSE:PRI) headfirst. Brave Warrior Capital, managed by Glenn Greenberg, assembled the biggest position in Primerica, Inc. (NYSE:PRI). Brave Warrior Capital had 124.9 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also initiated a $36.3 million position during the quarter. The other funds with brand new PRI positions are Richard S. Pzena’s Pzena Investment Management, Anthony Bozza’s Lakewood Capital Management, and Ken Griffin’s Citadel Investment Group.

Insider trading activity in Primerica, Inc. (NYSE:PRI)

Legal insider trading, particularly when it’s bullish, is best served when the primary stock in question has experienced transactions within the past 180 days. Over the latest half-year time frame, Primerica, Inc. (NYSE:PRI) has experienced zero unique insiders buying, and zero 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 Primerica, Inc. (NYSE:PRI). These stocks are Reinsurance Group of America Inc (NYSE:RGA), Aviva Plc (ADR) (NYSE:AV), American Equity Investment Life Holding (NYSE:AEL), Protective Life Corp. (NYSE:PL), and Symetra Financial Corporation (NYSE:SYA). This group of stocks are the members of the life insurance industry and their market caps are closest to PRI’s market cap.

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