Hedge funds run by legendary names like Nelson Peltz and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small caps are where they can generate significant out-performance. That’s why we pay special attention to hedge fund activity in these stocks.
W.R. Berkley Corporation (NYSE:WRB) investors should pay attention to an increase in hedge fund sentiment in recent months. At the end of this article we will also compare WRB to other stocks including The AES Corporation (NYSE:AES), Airgas, Inc. (NYSE:ARG), and PulteGroup, Inc. (NYSE:PHM) to get a better sense of its popularity.
Follow Berkley W R Corp (NYSE:WRB)
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Keeping this in mind, let’s take a glance at the recent action regarding W.R. Berkley Corporation (NYSE:WRB).
What does the smart money think about W.R. Berkley Corporation (NYSE:WRB)?
At the end of the third quarter, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 10% from the previous quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Boykin Curry’s Eagle Capital Management has the most valuable position in W.R. Berkley Corporation (NYSE:WRB), worth close to $433.5 million, amounting to 1.9% of its total 13F portfolio. On Eagle Capital Management’s heels is Ken Griffin of Citadel Investment Group, with a $60.6 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions consist of Israel Englander’s Millennium Management, Mario Gabelli’s GAMCO Investors and Paul Marshall and Ian Wace’s Marshall Wace LLP.
As one would reasonably expect, some big names were breaking ground themselves. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the most outsized position in W.R. Berkley Corporation (NYSE:WRB). Marshall Wace LLP had $19.6 million invested in the company at the end of the quarter. Joe DiMenna’s ZWEIG DIMENNA PARTNERS also made a $13.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Dmitry Balyasny’s Balyasny Asset Management, Millennium Management Subsidiary’s Blue Arrow Capital Management, and Michael Kaine’s Numina Capital.
Let’s also examine hedge fund activity in other stocks similar to W.R. Berkley Corporation (NYSE:WRB). These stocks are The AES Corporation (NYSE:AES), Airgas, Inc. (NYSE:ARG), PulteGroup, Inc. (NYSE:PHM), and Partnerre Ltd (NYSE:PRE). This group of stocks’ market valuations are similar to WRB’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AES | 30 | 210764 | 5 |
| ARG | 30 | 606260 | 1 |
| PHM | 27 | 470670 | 0 |
| PRE | 24 | 816976 | -11 |
As you can see these stocks had an average of 27.75 hedge funds with bullish positions and the average amount invested in these stocks was $526 million. That figure was $1014 million in WRB’s case. The AES Corporation (NYSE:AES) is the most popular stock in this table. On the other hand Partnerre Ltd (NYSE:PRE) is the least popular one with only 24 bullish hedge fund positions. Compared to these stocks W.R. Berkley Corporation (NYSE:WRB) is even less popular than PRE. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
