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Hedge Funds Are Betting On Symetra Financial Corporation (SYA)

The worries about the economic slowdown in China and the ongoing uncertainty about the path of interest-rate increases triggered several waves of equity sell-offs during the third quarter. Of course, most hedge funds and other asset managers had to stomach substantial losses during the bloody three-month period, which might have caused some to consider fleeing the U.S. equity markets. Interestingly, smaller-cap stocks registered higher losses than large-capitalization stocks during the September quarter, suggesting that institutional investors heavily discarded seemingly riskier equities amid high uncertainty and turmoil. In fact, the Russell 2000 Index lost 11.9% in the third quarter, while the Standard and Poor’s 500 benchmark declined a mere 6.4%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Symetra Financial Corporation (NYSE:SYA).

Symetra Financial Corporation (NYSE:SYA) shareholders have witnessed an increase in hedge fund interest in recent months. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Assured Guaranty Ltd. (NYSE:AGO), Highwoods Properties Inc (NYSE:HIW), and Urban Outfitters, Inc. (NASDAQ:URBN) to gather more data points.

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According to most market participants, hedge funds are viewed as worthless, outdated investment tools of yesteryear. While there are more than an 8000 funds with their doors open at the moment, Our experts hone in on the leaders of this club, about 700 funds. Most estimates calculate that this group of people watch over most of the hedge fund industry’s total capital, and by following their inimitable equity investments, Insider Monkey has determined a number of investment strategies that have historically defeated the broader indices. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points per annum for a decade in their back tests.

Now, we’re going to view the key action surrounding Symetra Financial Corporation (NYSE:SYA).

How have hedgies been trading Symetra Financial Corporation (NYSE:SYA)?

At Q3’s end, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a surge of 38% from the second quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

Of the funds tracked by Insider Monkey, John Orrico’s Water Island Capital has the number one position in Symetra Financial Corporation (NYSE:SYA), worth close to $75.4 million, comprising 3.9% of its total 13F portfolio. The second largest stake is held by Alec Litowitz and Ross Laser of Magnetar Capital, with a $60.6 million position; 1.6% of its 13F portfolio is allocated to the company. Other peers with similar optimism encompass Clint Carlson’s Carlson Capital, Paul Tudor Jones’s Tudor Investment Corp and Robert Emil Zoellner’s Alpine Associates.

As industrywide interest jumped, some big names have jumped into Symetra Financial Corporation (NYSE:SYA) headfirst. Water Island Capital, managed by John Orrico, created the most outsized position in Symetra Financial Corporation (NYSE:SYA), worth $75.4 million as mentioned before. Alec Litowitz and Ross Laser’s Magnetar Capital was the one who initiated the second most valuable stake in SYA over the third quarter. The other funds with new positions in the stock are Springbok Capital, run by Gavin Saitowitz And Cisco J. Del Valle, and Phill Gross and Robert Atchinson’s Adage Capital Management.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Symetra Financial Corporation (NYSE:SYA) but similarly valued. These stocks are Assured Guaranty Ltd. (NYSE:AGO), Highwoods Properties Inc (NYSE:HIW), Urban Outfitters, Inc. (NASDAQ:URBN), and Sun Communities Inc (NYSE:SUI). This group of stocks’ market valuations are closest to SYA’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AGO 36 734544 -10
HIW 9 89101 1
URBN 24 160271 -4
SUI 6 51953 -1

As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $259 million. That figure was $291 million in SYA’s case. Assured Guaranty Ltd. (NYSE:AGO) is the most popular stock in this table, while Sun Communities Inc (NYSE:SUI) is the least popular one with only 6 bullish hedge fund positions. Symetra Financial Corporation (NYSE:SYA) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard AGO might be a better candidate to consider a long position.

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