Now, according to many of your fellow readers, hedge funds are perceived as useless, outdated financial vehicles of a forgotten age. Although there are In excess of 8,000 hedge funds trading in present day, this site focuses on the bigwigs of this club, around 525 funds. Analysts calculate that this group controls the majority of the smart money's total assets, and by monitoring their highest quality investments, we've revealed a number of investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we've started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Equally as key, positive insider trading sentiment is a second way to analyze the marketplace. Just as you'd expect, there are many incentives for an insider to get rid of shares of his or her company, but just one, very clear reason why they would buy. Many empirical studies have demonstrated the impressive potential of this method if shareholders know what to do (learn more here).
Furthermore, we're going to discuss the newest info surrounding Radian Group Inc (NYSE:RDN).
In preparation for the third quarter, a total of 29 of the hedge funds we track held long positions in this stock, a change of -17% from one quarter earlier. With the smart money's positions undergoing their usual ebb and flow, there exists an "upper tier" of notable hedge fund managers who were upping their holdings substantially.
Out of the hedge funds we follow, Paulson & Co, managed by John Paulson, holds the largest position in Radian Group Inc (NYSE:RDN). Paulson & Co has a $132.4 million position in the stock, comprising 0.9% of its 13F portfolio. On Paulson & Co's heels is John Paulson of Paulson & Co, with a $107.8 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include Rob Citrone's Discovery Capital Management, Donald Chiboucis's Columbus Circle Investors and George Soros's Soros Fund Management.
Because Radian Group Inc (NYSE:RDN) has experienced dropping sentiment from the smart money's best and brightest, it's easy to see that there was a specific group of hedgies who were dropping their full holdings last quarter. Interestingly, George Soros's Soros Fund Management sold off the biggest investment of all the hedgies we key on, comprising an estimated $29.9 million in stock, and Robert Pohly of Samlyn Capital was right behind this move, as the fund dropped about $16.2 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 6 funds last quarter.
Bullish insider trading is at its handiest when the company in focus has experienced transactions within the past 180 days. Over the last half-year time frame, Radian Group Inc (NYSE:RDN) 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 Radian Group Inc (NYSE:RDN). These stocks are Enstar Group Ltd. (NASDAQ:ESGR), Endurance Specialty Holdings Ltd. (NYSE:ENH), MBIA Inc. (NYSE:MBI), Kemper Corporation (NYSE:KMPR), and Platinum Underwriters Holdings, Ltd. (NYSE:PTP). This group of stocks are in the property & casualty insurance industry and their market caps match RDN's market cap.