The Navigators Group, Inc (NAVG): Are Hedge Funds Right About This Stock?

Like everyone else, elite investors make mistakes. Some of their top consensus picks, such as Micron and Anadarko Petroleum, have not done well during the last 12 months ending in October due to various reasons. Nevertheless, the data show elite investors’ consensus picks have done well on average. The top 30 S&P 500 stocks among hedge funds at the end of September 2014 yielded an average return of 9.5% during the last four quarters ending in October and sixty three percent of these 30 stocks outperformed the market. S&P 500 Index returned only 5.2% during the same period and less than 49% of its constituents managed to beat this return. Because their consensus picks have done well, we pay attention to what elite funds think before doing extensive research on a stock. In this article, we take a closer look at The Navigators Group, Inc (NASDAQ:NAVG) from the perspective of those elite funds.

The Navigators Group, Inc (NASDAQ:NAVG) investors should pay attention to an increase in enthusiasm from smart money lately. NAVG was in 15 hedge funds’ portfolios at the end of September. There were 13 hedge funds in our database with NAVG positions at the end of the previous quarter. At the end of this article we will also compare NAVG to other stocks, including Vivint Solar Inc (NYSE:VSLR), Weis Markets, Inc. (NYSE:WMK), and Universal Corp (NYSE:UVV) to get a better sense of its popularity.

In today’s marketplace there are many formulas stock market investors have at their disposal to size up publicly traded companies. Some of the less known formulas are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the best picks of the top investment managers can outperform their index-focused peers by a healthy margin (see the details here).

Now, let’s review the recent action surrounding The Navigators Group, Inc (NASDAQ:NAVG).

Hedge fund activity in The Navigators Group, Inc (NASDAQ:NAVG)

At the end of the third quarter, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 15% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Renaissance Technologies holds the most valuable position in The Navigators Group, Inc (NASDAQ:NAVG). Renaissance Technologies has a $8.2 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second most bullish fund manager is Cliff Asness of AQR Capital Management, with a $5.1 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other professional money managers with similar optimism contain Israel Englander’s Millennium Management, Ken Griffin’s Citadel Investment Group and Chuck Royce’s Royce & Associates.

As aggregate interest increased, specific money managers were breaking ground themselves. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the most outsized position in The Navigators Group, Inc (NASDAQ:NAVG). Arrowstreet Capital had $0.5 million invested in the company at the end of the quarter. Lawrence Sapanski’s Scoria Capital also made a $0.5 million investment in the stock during the quarter. The other funds with brand new NAVG positions are Chao Ku’s Nine Chapters Capital Management and Bruce Silver’s Silver Capital Management LLC.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as The Navigators Group, Inc (NASDAQ:NAVG) but similarly valued. We will take a look at Vivint Solar Inc (NYSE:VSLR), Weis Markets, Inc. (NYSE:WMK), Universal Corp (NYSE:UVV), and First Cash Financial Services, Inc. (NASDAQ:FCFS). This group of stocks’ market valuations resemble NAVG’s market valuation.

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $91 million. That figure was $96 million in NAVG’s case. Vivint Solar Inc (NYSE:VSLR) is the most popular stock in this table with 14 funds reporting stakes, while Weis Markets, Inc. (NYSE:WMK) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks, The Navigators Group, Inc (NASDAQ:NAVG) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.