Do Hedge Funds and Insiders Love Primerica, Inc. (NYSE:PRI)? – Aviva Plc (ADR) (NYSE:AV), Reinsurance Group of America Inc (NYSE:RGA)

Primerica, Inc. (NYSE:PRI) was in 15 hedge funds’ portfolio at the end of December. PRI has seen an increase in support from the world’s most elite money managers lately. There were 13 hedge funds in our database with PRI positions at the end of the previous quarter.

In the eyes of most investors, hedge funds are seen as worthless, old investment vehicles of years past. While there are more than 8000 funds with their doors open today, we at Insider Monkey hone in on the masters of this club, close to 450 funds. It is widely believed that this group controls most of the smart money’s total asset base, and by paying attention to their highest performing picks, we have spotted a number of investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points a year 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 outperformed the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).

Primerica, Inc. (NYSE:PRI)Just as beneficial, positive insider trading activity is a second way to parse down the marketplace. Obviously, there are a variety of incentives for an upper level exec to drop shares of his or her company, but only one, very clear reason why they would initiate a purchase. Many empirical studies have demonstrated the market-beating potential of this tactic if shareholders understand where to look (learn more here).

Now, we’re going to take a look at the latest action surrounding Primerica, Inc. (NYSE:PRI).

How have hedgies been trading Primerica, Inc. (NYSE:PRI)?

In preparation for this year, a total of 15 of the hedge funds we track were long in this stock, a change of 15% from one quarter earlier. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their holdings considerably.

According to our comprehensive database, Brave Warrior Capital, managed by Glenn Greenberg, holds the largest position in Primerica, Inc. (NYSE:PRI). Brave Warrior Capital has a $91 million position in the stock, comprising 5.4% of its 13F portfolio. The second largest stake is held by D E Shaw, managed by D. E. Shaw, which held a $37 million position; 0% of its 13F portfolio is allocated to the company. Other hedgies that hold long positions include Anthony Bozza’s Lakewood Capital Management, Richard S. Pzena’s Pzena Investment Management and Cliff Asness’s AQR Capital Management.

Now, key hedge funds were leading the bulls’ herd. Two Sigma Advisors, managed by John Overdeck and David Siegel, created the largest position in Primerica, Inc. (NYSE:PRI). Two Sigma Advisors had 1 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also initiated a $1 million position during the quarter. The following funds were also among the new PRI investors: Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Israel Englander’s Millennium Management.

How are insiders trading Primerica, Inc. (NYSE:PRI)?

Insider trading activity, especially when it’s bullish, is best served when the company in focus has seen transactions within the past six months. Over the latest 180-day time period, Primerica, Inc. (NYSE:PRI) has seen zero unique insiders purchasing, and 12 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Primerica, Inc. (NYSE:PRI). These stocks are Reinsurance Group of America Inc (NYSE:RGA), Aviva Plc (ADR) (NYSE:AV), American Equity Investment Life Holding (NYSE:AEL), Protective Life Corp. (NYSE:PL), and Symetra Financial Corporation (NYSE:SYA). This group of stocks are the members of the life insurance industry and their market caps match PRI’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Reinsurance Group of America Inc (NYSE:RGA) 16 0 4
Aviva Plc (ADR) (NYSE:AV) 1 0 0
American Equity Investment Life Holding (NYSE:AEL) 14 1 3
Protective Life Corp. (NYSE:PL) 13 1 2
Symetra Financial Corporation (NYSE:SYA) 14 0 0

With the returns shown by the aforementioned strategies, retail investors should always monitor hedge fund and insider trading sentiment, and Primerica, Inc. (NYSE:PRI) applies perfectly to this mantra.

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Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.