Assurant, Inc. (NYSE:AIZ) investors should be aware of an increase in enthusiasm from smart money recently.
In the eyes of most market participants, hedge funds are perceived as slow, outdated investment vehicles of the past. While there are greater than 8000 funds trading at present, we at Insider Monkey look at the elite of this group, about 450 funds. It is estimated that this group controls the majority of the smart money's total asset base, and by tracking their top picks, we have formulated a few investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year 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 topped the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Just as important, bullish insider trading activity is another way to break down the investments you're interested in. As the old adage goes: there are lots of reasons for an insider to cut shares of his or her company, but only one, very simple reason why they would initiate a purchase. Various academic studies have demonstrated the impressive potential of this tactic if "monkeys" understand what to do (learn more here).
Consequently, let's take a glance at the latest action regarding Assurant, Inc. (NYSE:AIZ).
In preparation for this year, a total of 17 of the hedge funds we track held long positions in this stock, a change of 13% from the previous quarter. With hedgies' capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings substantially.
Of the funds we track, Cliff Asness's AQR Capital Management had the largest position in Assurant, Inc. (NYSE:AIZ), worth close to $75 million, accounting for 0.3% of its total 13F portfolio. Sitting at the No. 2 spot is Diamond Hill Capital, managed by Ric Dillon, which held a $61 million position; 0.3% of its 13F portfolio is allocated to the company. Other hedgies with similar optimism include Richard S. Pzena's Pzena Investment Management, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital and Israel Englander's Millennium Management.
As one would reasonably expect, key hedge funds have jumped into Assurant, Inc. (NYSE:AIZ) headfirst. Pzena Investment Management, managed by Richard S. Pzena, assembled the biggest position in Assurant, Inc. (NYSE:AIZ). Pzena Investment Management had 37 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also initiated a $7 million position during the quarter. The following funds were also among the new AIZ investors: Steven Cohen's SAC Capital Advisors, SAC Subsidiary's CR Intrinsic Investors, and Abby Flamholz and Yehuda Blinder's ADAR Investment Management.
Bullish insider trading is at its handiest when the company we're looking at has experienced transactions within the past six months. Over the latest 180-day time frame, Assurant, Inc. (NYSE:AIZ) has seen zero unique insiders buying, and 1 insider sales (see the details of insider trades here).
With the returns demonstrated by Insider Monkey's tactics, everyday investors must always pay attention to hedge fund and insider trading sentiment, and Assurant, Inc. (NYSE:AIZ) is an important part of this process.
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.