XL Group plc (NYSE:XL) has seen an increase in support from the world’s most elite money managers of late.
In the eyes of most investors, hedge funds are perceived as worthless, old financial tools of yesteryear. While there are over 8000 funds trading at present, we hone in on the masters of this club, about 450 funds. It is estimated that this group oversees most of the hedge fund industry’s total asset base, and by watching their top picks, we have identified a number of investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy beat 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Equally as key, optimistic insider trading activity is another way to parse down the marketplace. As the old adage goes: there are many reasons for an executive to get rid of shares of his or her company, but just one, very simple reason why they would buy. Many empirical studies have demonstrated the impressive potential of this method if piggybackers know where to look (learn more here).
Consequently, we’re going to take a gander at the key action regarding XL Group plc (NYSE:XL).
What does the smart money think about XL Group plc (NYSE:XL)?
At Q1’s end, a total of 26 of the hedge funds we track were long in this stock, a change of 8% from the first quarter. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings considerably.
When looking at the hedgies we track, Ken Griffin’s Citadel Investment Group had the biggest position in XL Group plc (NYSE:XL), worth close to $168 million, accounting for 0.3% of its total 13F portfolio. The second largest stake is held by Leon Cooperman of Omega Advisors, with a $122.2 million position; the fund has 1.9% of its 13F portfolio invested in the stock. Other peers that hold long positions include Jim Simons’s Renaissance Technologies, Phill Gross and Robert Atchinson’s Adage Capital Management and Anthony Bozza’s Lakewood Capital Management.
With a general bullishness amongst the heavyweights, specific money managers were breaking ground themselves. Renaissance Technologies, managed by Jim Simons, established the most valuable position in XL Group plc (NYSE:XL). Renaissance Technologies had 65.9 million invested in the company at the end of the quarter. Kevin Michael Ulrich’s Anchorage Advisors also made a $34.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Anand Parekh’s Alyeska Investment Group, Andrew Sandler’s Sandler Capital Management, and Ken Gray and Steve Walsh’s Bryn Mawr Capital.
Insider trading activity in XL Group plc (NYSE:XL)
Bullish insider trading is most useful when the company in question has experienced transactions within the past 180 days. Over the latest six-month time period, XL Group plc (NYSE:XL) has seen zero unique insiders buying, and 2 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to XL Group plc (NYSE:XL). These stocks are Arch Capital Group Ltd. (NASDAQ:ACGL), Hartford Financial Services Group Inc (NYSE:HIG), Cincinnati Financial Corporation (NASDAQ:CINF), Everest Re Group Ltd (NYSE:RE), and Cna Financial Corp (NYSE:CNA). All of these stocks are in the property & casualty insurance industry and their market caps are similar to XL’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Arch Capital Group Ltd. (NASDAQ:ACGL) | 12 | 0 | 6 |
| Hartford Financial Services Group Inc (NYSE:HIG) | 44 | 0 | 0 |
| Cincinnati Financial Corporation (NASDAQ:CINF) | 9 | 1 | 0 |
| Everest Re Group Ltd (NYSE:RE) | 17 | 0 | 3 |
| Cna Financial Corp (NYSE:CNA) | 12 | 0 | 2 |
With the returns exhibited by the aforementioned studies, everyday investors should always monitor hedge fund and insider trading activity, and XL Group plc (NYSE:XL) is an important part of this process.
