MBIA Inc. (NYSE:MBI) shareholders have witnessed a decrease in hedge fund sentiment of late.
In the 21st century investor’s toolkit, there are plenty of indicators shareholders can use to track the equity markets. A pair of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best money managers can trounce the broader indices by a very impressive amount (see just how much).
Equally as key, positive insider trading activity is a second way to break down the marketplace. As the old adage goes: there are many stimuli for an insider to cut shares of his or her company, but just one, very clear reason why they would buy. Plenty of academic studies have demonstrated the impressive potential of this method if shareholders understand what to do (learn more here).
With all of this in mind, it’s important to take a gander at the key action encompassing MBIA Inc. (NYSE:MBI).
How are hedge funds trading MBIA Inc. (NYSE:MBI)?
At the end of the fourth quarter, a total of 25 of the hedge funds we track were long in this stock, a change of -17% from the previous quarter. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes significantly.
Of the funds we track, Fairholme (FAIRX), managed by Bruce Berkowitz, holds the largest position in MBIA Inc. (NYSE:MBI). Fairholme (FAIRX) has a $333.6 million position in the stock, comprising 4.8% of its 13F portfolio. Coming in second is Elm Ridge Capital, managed by Ron Gutfleish, which held a $30.8 million position; the fund has 3.5% of its 13F portfolio invested in the stock. Other peers that are bullish include Irving Kahn’s Kahn Brothers, Jim Simons’s Renaissance Technologies and Debra Fine’s Fine Capital Partners.
Because MBIA Inc. (NYSE:MBI) has experienced bearish sentiment from hedge fund managers, it’s safe to say that there is a sect of fund managers that elected to cut their full holdings last quarter. Interestingly, John London and Steve Weinstein’s SuttonBrook Capital cut the largest position of all the hedgies we track, comprising an estimated $13.9 million in stock., and Richard Perry of Perry Capital was right behind this move, as the fund sold off about $13.6 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 5 funds last quarter.
What have insiders been doing with MBIA Inc. (NYSE:MBI)?
Insider trading activity, especially when it’s bullish, is most useful when the company in focus has seen transactions within the past six months. Over the latest six-month time frame, MBIA Inc. (NYSE:MBI) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to MBIA Inc. (NYSE:MBI). These stocks are Platinum Underwriters Holdings, Ltd. (NYSE:PTP), Mercury General Corporation (NYSE:MCY), Enstar Group Ltd. (NASDAQ:ESGR), Endurance Specialty Holdings Ltd. (NYSE:ENH), and Kemper Corporation (NYSE:KMPR). This group of stocks are in the property & casualty insurance industry and their market caps are closest to MBI’s market cap.