Travelers Companies Inc (NYSE:TRV) was in 29 hedge funds’ portfolio at the end of the first quarter of 2013. TRV has seen an increase in activity from the world’s largest hedge funds in recent months. There were 28 hedge funds in our database with TRV positions at the end of the previous quarter.
In the eyes of most stock holders, hedge funds are viewed as underperforming, old investment vehicles of yesteryear. While there are more than 8000 funds in operation at the moment, we look at the top tier of this club, around 450 funds. It is widely believed that this group controls the majority of the smart money’s total capital, and by tracking their top stock picks, we have brought to light a few investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Equally as important, bullish insider trading activity is another way to break down the stock market universe. There are lots of incentives for an upper level exec to sell shares of his or her company, but only one, very simple reason why they would behave bullishly. Many academic studies have demonstrated the market-beating potential of this strategy if piggybackers know where to look (learn more here).
With all of this in mind, it’s important to take a glance at the latest action surrounding Travelers Companies Inc (NYSE:TRV).
How are hedge funds trading Travelers Companies Inc (NYSE:TRV)?
Heading into Q2, a total of 29 of the hedge funds we track were long in this stock, a change of 4% from one quarter earlier. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were boosting their holdings considerably.
According to our comprehensive database, Mason Hawkins’s Southeastern Asset Management had the largest position in Travelers Companies Inc (NYSE:TRV), worth close to $1.2576 billion, accounting for 5.7% of its total 13F portfolio. Coming in second is Ken Griffin of Citadel Investment Group, with a $151 million position; 0.2% of its 13F portfolio is allocated to the stock. Some other peers that are bullish include Cliff Asness’s AQR Capital Management, Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC and Phill Gross and Robert Atchinson’s Adage Capital Management.
As aggregate interest increased, specific money managers have been driving this bullishness. First Pacific Advisors LLC, managed by Robert Rodriguez and Steven Romick, initiated the biggest position in Travelers Companies Inc (NYSE:TRV). First Pacific Advisors LLC had 61.2 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also made a $17.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Daniel S. Och’s OZ Management, John Overdeck and David Siegel’s Two Sigma Advisors, and David Costen Haley’s HBK Investments.
What have insiders been doing with Travelers Companies Inc (NYSE:TRV)?
Bullish insider trading is best served when the primary stock in question has seen transactions within the past six months. Over the last 180-day time frame, Travelers Companies Inc (NYSE:TRV) has experienced 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 Travelers Companies Inc (NYSE:TRV). These stocks are Loews Corporation (NYSE:L), American International Group Inc (NYSE:AIG), The Chubb Corporation (NYSE:CB), The Allstate Corporation (NYSE:ALL), and ACE Limited (NYSE:ACE). This group of stocks are the members of the property & casualty insurance industry and their market caps match TRV’s market cap.