To many of your peers, hedge funds are viewed as bloated, outdated financial tools of an era lost to time. Although there are over 8,000 hedge funds in operation currently, this site focuses on the masters of this club, about 525 funds. It is widely held that this group has its hands on the lion’s share of all hedge funds’ total capital, and by monitoring their highest performing picks, we’ve figured out a few investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).
Just as useful, bullish insider trading sentiment is a second way to analyze the financial markets. Obviously, there are a variety of reasons for a bullish insider to drop shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the valuable potential of this tactic if investors know where to look (learn more here).
Furthermore, let’s study the latest info for MGIC Investment Corp. (NYSE:MTG).
What have hedge funds been doing with MGIC Investment Corp. (NYSE:MTG)?
At the end of the second quarter, a total of 37 of the hedge funds we track were long in this stock, a change of 0% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their holdings significantly.
When using filings from the hedgies we track, John Paulson’s Paulson & Co had the biggest position in MGIC Investment Corp. (NYSE:MTG), worth close to $169.9 million, accounting for 1.2% of its total 13F portfolio. Sitting at the No. 2 spot is Avenue Capital, managed by Marc Lasry, which held a $121.9 million position; the fund has 14.9% of its 13F portfolio invested in the stock. Remaining hedgies that hold long positions include John Paulson’s Paulson & Co, John Griffin’s Blue Ridge Capital and Lee Ainslie’s Maverick Capital.
As MGIC Investment Corp. (NYSE:MTG) has experienced dropping sentiment from the top-tier hedge fund industry, it’s safe to say that there was a specific group of money managers who were dropping their full holdings at the end of the second quarter. Intriguingly, Brian Jackelow’s SAB Capital Management cut the biggest position of the “upper crust” of funds we track, totaling close to $60.7 million in stock. Boaz Weinstein’s fund, Saba Capital, also cut its stock, about $6.2 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
What do corporate executives and insiders think about MGIC Investment Corp. (NYSE:MTG)?
Insider buying is most useful when the primary stock in question has seen transactions within the past six months. Over the latest half-year time frame, MGIC Investment Corp. (NYSE:MTG) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll go over the relationship between both of these indicators in other stocks similar to MGIC Investment Corp. (NYSE:MTG). These stocks are Hilltop Holdings Inc. (NYSE:HTH), Greenlight Capital Re, Ltd. (NASDAQ:GLRE), Tower Group International Ltd (NASDAQ:TWGP), Argo Group International Holdings, Ltd. (NASDAQ:AGII), and FBL Financial Group (NYSE:FFG). This group of stocks belong to the property & casualty insurance industry and their market caps are similar to MTG’s market cap.