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Prudential Financial Inc (NYSE:PRU): Are Hedge Funds Right About This Stock?

Prudential Financial Inc (NYSE:PRU) was in 30 hedge funds’ portfolio at the end of the fourth quarter of 2012. PRU investors should pay attention to an increase in hedge fund sentiment lately. There were 26 hedge funds in our database with PRU positions at the end of the previous quarter.

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To the average investor, there are a multitude of indicators investors can use to monitor Mr. Market. A duo of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite investment managers can outpace the S&P 500 by a healthy amount (see just how much).

Equally as beneficial, bullish insider trading sentiment is a second way to break down the marketplace. Obviously, there are plenty of motivations for an insider to drop shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Several academic studies have demonstrated the market-beating potential of this method if piggybackers know what to do (learn more here).

With all of this in mind, we’re going to take a gander at the key action regarding Prudential Financial Inc (NYSE:PRU).

What have hedge funds been doing with Prudential Financial Inc (NYSE:PRU)?

In preparation for this year, a total of 30 of the hedge funds we track were long in this stock, a change of 15% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes meaningfully.

When looking at the hedgies we track, Ken Griffin’s Citadel Investment Group had the biggest position in Prudential Financial Inc (NYSE:PRU), worth close to $286 million, accounting for 0.4% of its total 13F portfolio. Coming in second is Diamond Hill Capital, managed by Ric Dillon, which held a $148 million position; 0.2% of its 13F portfolio is allocated to the company. Remaining peers that are bullish include Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Jim Simons’s Renaissance Technologies and D. E. Shaw’s D E Shaw.

As industrywide interest jumped, specific money managers were leading the bulls’ herd. Renaissance Technologies, managed by Jim Simons, assembled the biggest position in Prudential Financial Inc (NYSE:PRU). Renaissance Technologies had 61 million invested in the company at the end of the quarter. Phill Gross and Robert Atchinson’s Adage Capital Management also made a $16 million investment in the stock during the quarter. The following funds were also among the new PRU investors: Wayne Cooperman’s Cobalt Capital Management, Ken Gray and Steve Walsh’s Bryn Mawr Capital, and Daniel S. Och’s OZ Management.

How are insiders trading Prudential Financial Inc (NYSE:PRU)?

Insider buying is most useful when the company in question has seen transactions within the past 180 days. Over the last six-month time frame, Prudential Financial Inc (NYSE:PRU) has experienced 1 unique insiders buying, and 6 insider sales (see the details of insider trades here).

With the returns exhibited by the aforementioned time-tested strategies, retail investors must always watch hedge fund and insider trading sentiment, and Prudential Financial Inc (NYSE:PRU) shareholders fit into this picture quite nicely.

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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