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Old Republic International Corporation (NYSE:ORI): Are Hedge Funds Right About This Stock?

Old Republic International Corporation (NYSE:ORI) was in 23 hedge funds’ portfolio at the end of the fourth quarter of 2012. ORI has seen an increase in enthusiasm from smart money lately. There were 22 hedge funds in our database with ORI positions at the end of the previous quarter.

In the eyes of most shareholders, hedge funds are assumed to be unimportant, outdated financial vehicles of yesteryear. While there are more than 8000 funds in operation at present, we hone in on the elite of this club, close to 450 funds. Most estimates calculate that this group controls the majority of all hedge funds’ total asset base, and by watching their highest performing stock picks, we have determined a number of investment strategies that have historically outpaced the market. 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 began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).

Equally as key, bullish insider trading sentiment is a second way to parse down the world of equities. Obviously, there are lots of stimuli for a bullish insider to sell shares of his or her company, but only one, very clear reason why they would initiate a purchase. Many empirical studies have demonstrated the useful potential of this strategy if “monkeys” know what to do (learn more here).

With all of this in mind, it’s important to take a look at the latest action surrounding Old Republic International Corporation (NYSE:ORI).

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

Heading into 2013, a total of 23 of the hedge funds we track were bullish in this stock, a change of 5% from the previous quarter. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were increasing their stakes meaningfully.

Irving Kahn

Of the funds we track, Scopia Capital, managed by Matt Sirovich and Jeremy Mindich, holds the most valuable position in Old Republic International Corporation (NYSE:ORI). Scopia Capital has a $50 million position in the stock, comprising 2% of its 13F portfolio. On Scopia Capital’s heels is Kahn Brothers, managed by Irving Kahn, which held a $35 million position; 0.8% of its 13F portfolio is allocated to the company. Remaining peers that are bullish include Michael Blitzer’s Kingstown Capital Management, Ric Dillon’s Diamond Hill Capital and Chuck Royce’s Royce & Associates.

Now, specific money managers were breaking ground themselves. Sirios Capital Management, managed by John Brennan, initiated the biggest position in Old Republic International Corporation (NYSE:ORI). Sirios Capital Management had 5 million invested in the company at the end of the quarter. Charles Davidson’s Wexford Capital also initiated a $1 million position during the quarter. The other funds with new positions in the stock are Jim Simons’s Renaissance Technologies, Douglas W. Case’s Advanced Investment Partners, and Neil Chriss’s Hutchin Hill Capital.

Insider trading activity in Old Republic International Corporation (NYSE:ORI)

Insider purchases made by high-level executives is best served when the primary stock in question has experienced transactions within the past half-year. Over the latest half-year time period, Old Republic International Corporation (NYSE:ORI) has seen 3 unique insiders purchasing, and zero insider sales (see the details of insider trades here).

With the returns demonstrated by the aforementioned time-tested strategies, retail investors must always keep an eye on hedge fund and insider trading sentiment, and Old Republic International Corporation (NYSE:ORI) applies perfectly to this mantra.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.

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