Genworth Financial Inc (NYSE:GNW) was in 35 hedge funds’ portfolio at the end of December. GNW has seen an increase in activity from the world’s largest hedge funds recently. There were 27 hedge funds in our database with GNW positions at the end of the previous quarter.
If you’d ask most shareholders, hedge funds are assumed to be underperforming, old investment tools of the past. While there are greater than 8000 funds in operation at the moment, we look at the masters of this group, around 450 funds. It is estimated that this group controls the lion’s share of the smart money’s total capital, and by monitoring their best equity investments, we have brought to light a few investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outpaced 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 outperformed the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).
Just as beneficial, optimistic insider trading activity is another way to break down the investments you’re interested in. Obviously, there are a number of incentives for an insider to downsize shares of his or her company, but just one, very simple reason why they would buy. Several academic studies have demonstrated the market-beating potential of this strategy if you understand what to do (learn more here).
With these “truths” under our belt, it’s important to take a look at the recent action surrounding Genworth Financial Inc (NYSE:GNW).
How have hedgies been trading Genworth Financial Inc (NYSE:GNW)?
At year’s end, a total of 35 of the hedge funds we track were long in this stock, a change of 30% from the previous quarter. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were increasing their stakes meaningfully.
When looking at the hedgies we track, Highfields Capital Management, managed by Jonathon Jacobson, holds the largest position in Genworth Financial Inc (NYSE:GNW). Highfields Capital Management has a $204 million billion position in the stock, comprising 2.3% of its 13F portfolio. Coming in second is Seth Klarman of Baupost Group, with a $113 million position; 0.2% of its 13F portfolio is allocated to the company. Remaining hedge funds that are bullish include Edward Lampert’s ESL Investments, Bill Miller’s Legg Mason Capital Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
As industrywide interest jumped, some big names were breaking ground themselves. Paulson & Co, managed by John Paulson, established the most outsized position in Genworth Financial Inc (NYSE:GNW). Paulson & Co had 29 million invested in the company at the end of the quarter. Brian J. Higgins’s King Street Capital also initiated a $27 million position during the quarter. The other funds with brand new GNW positions are Boaz Weinstein’s Saba Capital, Debra Fine’s Fine Capital Partners, and Jim Simons’s Renaissance Technologies.
Insider trading activity in Genworth Financial Inc (NYSE:GNW)
Insider buying is best served when the company in focus has experienced transactions within the past six months. Over the last 180-day time frame, Genworth Financial Inc (NYSE:GNW) has seen 1 unique insiders buying, and zero insider sales (see the details of insider trades here).
With the results demonstrated by the aforementioned tactics, everyday investors must always keep an eye on hedge fund and insider trading activity, and Genworth Financial Inc (NYSE:GNW) applies perfectly to this mantra.