Hilltop Holdings Inc. (NYSE:HTH) was in 17 hedge funds' portfolio at the end of March. HTH has seen an increase in activity from the world's largest hedge funds in recent months. There were 14 hedge funds in our database with HTH positions at the end of the previous quarter.
If you'd ask most market participants, hedge funds are viewed as underperforming, outdated financial vehicles of years past. While there are more than 8000 funds in operation today, we at Insider Monkey choose to focus on the masters of this club, about 450 funds. It is widely believed that this group has its hands on the majority of the hedge fund industry's total capital, and by monitoring their highest performing picks, we have revealed 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 annum 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 outclassed the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Equally as integral, optimistic insider trading sentiment is another way to break down the financial markets. There are a number of stimuli for an insider to cut shares of his or her company, but only one, very obvious reason why they would behave bullishly. Several empirical studies have demonstrated the market-beating potential of this tactic if "monkeys" know what to do (learn more here).
Keeping this in mind, we're going to take a gander at the key action surrounding Hilltop Holdings Inc. (NYSE:HTH).
In preparation for this quarter, a total of 17 of the hedge funds we track were long in this stock, a change of 21% from the first quarter. With hedge funds' positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their stakes considerably.
According to our comprehensive database, Chuck Royce's Royce & Associates had the largest position in Hilltop Holdings Inc. (NYSE:HTH), worth close to $10.8 million, comprising less than 0.1%% of its total 13F portfolio. Coming in second is Bandera Partners, managed by Gregory Bylinsky and Jefferson Gramm, which held a $10.6 million position; 4.6% of its 13F portfolio is allocated to the company. Other hedge funds with similar optimism include Jim Simons's Renaissance Technologies, Jonathon Jacobson's Highfields Capital Management and Michael Price's MFP Investors.
As industrywide interest jumped, some big names were breaking ground themselves. Parameter Capital Management, managed by Anil Stevens and Glenn Shapiro, assembled the most valuable position in Hilltop Holdings Inc. (NYSE:HTH). Parameter Capital Management had 1.3 million invested in the company at the end of the quarter. Paul Tudor Jones's Tudor Investment Corp also initiated a $0.4 million position during the quarter. The other funds with brand new HTH positions are Steven Cohen's SAC Capital Advisors, Matthew Tewksbury's Stevens Capital Management, and Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital.
Bullish insider trading is particularly usable when the company we're looking at has experienced transactions within the past six months. Over the latest half-year time period, Hilltop Holdings Inc. (NYSE:HTH) has experienced 3 unique insiders buying, and zero insider sales (see the details of insider trades here).
Let's also examine hedge fund and insider activity in other stocks similar to Hilltop Holdings Inc. (NYSE:HTH). These stocks are Selective Insurance Group (NASDAQ:SIGI), FBL Financial Group (NYSE:FFG), MGIC Investment Corp. (NYSE:MTG), Argo Group International Holdings, Ltd. (NASDAQ:AGII), and Tower Group International Ltd (NASDAQ:TWGP). This group of stocks are in the property & casualty insurance industry and their market caps are similar to HTH's market cap.