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Assurant, Inc. (AIZ): Hedge Funds Taking Money Off The Table

Does Assurant, Inc. (NYSE:AIZ) represent a good buying opportunity at the moment? Let’s quickly check the hedge fund interest towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on satellite photos and other research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail inconceivably on some occasions, but net net their stock picks have been generating superior risk-adjusted returns on average over the years.

Assurant, Inc. (NYSE:AIZ) investors should be aware of a decrease in activity from the world’s largest hedge funds lately. AIZ was in 27 hedge funds’ portfolios at the end of the third quarter of 2019. There were 29 hedge funds in our database with AIZ positions at the end of the previous quarter. Our calculations also showed that AIZ isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

According to most investors, hedge funds are assumed to be slow, outdated investment vehicles of the past. While there are over 8000 funds trading at the moment, We choose to focus on the aristocrats of this club, about 750 funds. It is estimated that this group of investors shepherd bulk of the smart money’s total capital, and by observing their finest picks, Insider Monkey has found a few investment strategies that have historically outperformed the broader indices. Insider Monkey’s flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points per annum since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .

Andreas Halvorsen

Andreas Halvorsen of Viking Global

Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. Let’s take a peek at the key hedge fund action regarding Assurant, Inc. (NYSE:AIZ).

How are hedge funds trading Assurant, Inc. (NYSE:AIZ)?

At the end of the third quarter, a total of 27 of the hedge funds tracked by Insider Monkey were long this stock, a change of -7% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards AIZ over the last 17 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

AIZ_dec2019

More specifically, Lyrical Asset Management was the largest shareholder of Assurant, Inc. (NYSE:AIZ), with a stake worth $208.8 million reported as of the end of September. Trailing Lyrical Asset Management was Viking Global, which amassed a stake valued at $177.9 million. Renaissance Technologies, Samlyn Capital, and AQR Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position One Fin Capital Management allocated the biggest weight to Assurant, Inc. (NYSE:AIZ), around 5.58% of its portfolio. Strycker View Capital is also relatively very bullish on the stock, setting aside 4.64 percent of its 13F equity portfolio to AIZ.

Judging by the fact that Assurant, Inc. (NYSE:AIZ) has witnessed bearish sentiment from the entirety of the hedge funds we track, logic holds that there were a few hedge funds who were dropping their full holdings heading into Q4. At the top of the heap, James Dinan’s York Capital Management dumped the largest investment of the “upper crust” of funds followed by Insider Monkey, worth about $21.6 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also dropped its stock, about $15.7 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 2 funds heading into Q4.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Assurant, Inc. (NYSE:AIZ) but similarly valued. These stocks are Graco Inc. (NYSE:GGG), Hyatt Hotels Corporation (NYSE:H), Fortune Brands Home & Security Inc (NYSE:FBHS), and AMERCO (NASDAQ:UHAL). This group of stocks’ market values are similar to AIZ’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
GGG 19 187451 -5
H 28 932324 5
FBHS 33 555866 2
UHAL 10 400813 -5
Average 22.5 519114 -0.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 22.5 hedge funds with bullish positions and the average amount invested in these stocks was $519 million. That figure was $905 million in AIZ’s case. Fortune Brands Home & Security Inc (NYSE:FBHS) is the most popular stock in this table. On the other hand AMERCO (NASDAQ:UHAL) is the least popular one with only 10 bullish hedge fund positions. Assurant, Inc. (NYSE:AIZ) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on AIZ, though not to the same extent, as the stock returned 6.1% during the first two months of the fourth quarter and outperformed the market as well.

Disclosure: None. This article was originally published at Insider Monkey.

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