China Life Insurance Company Ltd. (ADR) (NYSE:LFC) has seen an increase in hedge fund sentiment of late.
If you’d ask most stock holders, hedge funds are perceived as unimportant, outdated financial tools of years past. While there are greater than 8000 funds in operation at present, we at Insider Monkey choose to focus on the elite of this club, about 450 funds. It is widely believed that this group has its hands on most of the smart money’s total capital, and by tracking their top equity investments, we have revealed a number of investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually 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 outpaced the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Just as key, optimistic insider trading sentiment is another way to break down the stock market universe. Just as you’d expect, there are plenty of motivations for a corporate insider to downsize shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Several academic studies have demonstrated the useful potential of this tactic if shareholders understand where to look (learn more here).
Now, we’re going to take a peek at the latest action surrounding China Life Insurance Company Ltd. (ADR) (NYSE:LFC).
How are hedge funds trading China Life Insurance Company Ltd. (ADR) (NYSE:LFC)?
At Q1’s end, a total of 9 of the hedge funds we track held long positions in this stock, a change of 29% from one quarter earlier. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes meaningfully.
According to our comprehensive database, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital had the largest position in China Life Insurance Company Ltd. (ADR) (NYSE:LFC), worth close to $22.5 million, comprising 0.2% of its total 13F portfolio. The second largest stake is held by Citadel Investment Group, managed by Ken Griffin, which held a $6.7 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other hedge funds that are bullish include Israel Englander’s Millennium Management, Jim Simons’s Renaissance Technologies and Jane Mendillo’s Harvard Management Co.
Consequently, key hedge funds have been driving this bullishness. Millennium Management, managed by Israel Englander, created the biggest position in China Life Insurance Company Ltd. (ADR) (NYSE:LFC). Millennium Management had 3.5 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $3.1 million investment in the stock during the quarter. The other funds with new positions in the stock are Matthew Tewksbury’s Stevens Capital Management and D. E. Shaw’s D E Shaw.
Insider trading activity in China Life Insurance Company Ltd. (ADR) (NYSE:LFC)
Bullish insider trading is most useful when the company in question has seen transactions within the past six months. Over the last six-month time period, China Life Insurance Company Ltd. (ADR) (NYSE:LFC) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to China Life Insurance Company Ltd. (ADR) (NYSE:LFC). These stocks are Manulife Financial Corporation (USA) (NYSE:MFC), Prudential Financial Inc (NYSE:PRU), ING Groep N.V. (ADR) (NYSE:ING), Prudential Public Limited Company (ADR) (NYSE:PUK), and Metlife Inc (NYSE:MET). This group of stocks belong to the life insurance industry and their market caps resemble LFC’s market cap.