Is Safety Insurance Group, Inc. (SAFT) Going to Burn These Hedge Funds?

We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Balyasny Asset Management. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 700+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Tudor Investment Corp).

Let’s also examine hedge fund activity in other stocks similar to Safety Insurance Group, Inc. (NASDAQ:SAFT). These stocks are Ixia (NASDAQ:XXIA), The Ensign Group, Inc. (NASDAQ:ENSG), Hercules Technology Growth Capital Inc (NYSE:HTGC), and Hannon Armstrong Sustnbl Infrstr Cap Inc (NYSE:HASI). All of these stocks’ market caps match SAFT’s market cap.

As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $43 million. That figure was $32 million in SAFT’s case. Ixia (NASDAQ:XXIA) is the most popular stock in this table. On the other hand Hannon Armstrong Sustnbl Infrstr Cap Inc (NYSE:HASI) is the least popular one with only 5 bullish hedge fund positions. Safety Insurance Group, Inc. (NASDAQ:SAFT) is not the least popular stock in this group but hedge fund interest is just average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard XXIA might be a better candidate to consider taking a long position in.