To the average investor, there are dozens of metrics market participants can use to watch Mr. Market. A pair of the most useful are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best investment managers can trounce the market by a superb amount (see just how much).
Equally as useful, positive insider trading sentiment is another way to analyze the financial markets. Just as you’d expect, there are a number of reasons for an executive to get rid of shares of his or her company, but only one, very obvious reason why they would buy. Many empirical studies have demonstrated the valuable potential of this method if piggybackers know where to look (learn more here).
Thus, it’s important to analyze the newest info for First American Financial Corp (NYSE:FAF).
What does the smart money think about First American Financial Corp (NYSE:FAF)?
At the end of the second quarter, a total of 28 of the hedge funds we track were long in this stock, a change of 8% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were increasing their holdings considerably.
According to our 13F database, John W. Rogers’s Ariel Investments had the biggest position in First American Financial Corp (NYSE:FAF), worth close to $190.7 million, accounting for 3.1% of its total 13F portfolio. The second largest stake is held by Odey Asset Management Group, managed by Crispin Odey, which held a $29.9 million position; 1.2% of its 13F portfolio is allocated to the company. Some other peers that are bullish include Robert Pohly’s Samlyn Capital, Jim Simons’s Renaissance Technologies and Israel Englander’s Millennium Management.
As one would understandably expect, certain bigger names were breaking ground themselves. Ariel Investments, managed by John W. Rogers, initiated the most outsized position in First American Financial Corp (NYSE:FAF). Ariel Investments had 190.7 million invested in the company at the end of the quarter. Crispin Odey’s Odey Asset Management Group also made a $29.9 million investment in the stock during the quarter. The other funds with brand new FAF positions are Robert Pohly’s Samlyn Capital, Jim Simons’s Renaissance Technologies, and Israel Englander’s Millennium Management.
What have insiders been doing with First American Financial Corp (NYSE:FAF)?
Insider buying made by high-level executives is particularly usable when the company in question has experienced transactions within the past 180 days. Over the last six-month time frame, First American Financial Corp (NYSE:FAF) has experienced 3 unique insiders buying, and 1 insider sales (see the details of insider trades here).
We’ll also take a look at the relationship between both of these indicators in other stocks similar to First American Financial Corp (NYSE:FAF). These stocks are Allied World Assurance Co Holdings, AG. (NYSE:AWH), Alterra Capital Holdings Ltd (NASDAQ:ALTE), Corelogic Inc (NYSE:CLGX), ProAssurance Corporation (NYSE:PRA), and Aspen Insurance Holdings Limited (NYSE:AHL). This group of stocks are in the property & casualty insurance industry and their market caps resemble FAF’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Allied World Assurance Co Holdings, AG. (NYSE:AWH)||11||2||3|
|Alterra Capital Holdings Ltd (NASDAQ:ALTE)||0||1|
|Corelogic Inc (NYSE:CLGX)||21||1||3|
|ProAssurance Corporation (NYSE:PRA)||15||1||0|
|Aspen Insurance Holdings Limited (NYSE:AHL)||21||1||8|
Using the results shown by the previously mentioned analyses, average investors must always watch hedge fund and insider trading activity, and First American Financial Corp (NYSE:FAF) is an important part of this process.