Hedge Funds Are Selling AFLAC Incorporated (NYSE:AFL)

AFLAC Incorporated (NYSE:AFL) investors should pay attention to a decrease in enthusiasm from smart money in recent months.

In today’s marketplace, there are dozens of indicators investors can use to watch Mr. Market. A pair of the most underrated are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite hedge fund managers can outperform the S&P 500 by a healthy amount (see just how much).

AFLAC Incorporated (NYSE:AFL)Equally as important, optimistic insider trading activity is a second way to parse down the financial markets. There are many stimuli for a bullish insider to get rid of shares of his or her company, but just one, very simple reason why they would behave bullishly. Many empirical studies have demonstrated the market-beating potential of this method if investors know where to look (learn more here).

With these “truths” under our belt, we’re going to take a gander at the key action regarding AFLAC Incorporated (NYSE:AFL).

What have hedge funds been doing with AFLAC Incorporated (NYSE:AFL)?

Heading into 2013, a total of 21 of the hedge funds we track were bullish in this stock, a change of -13% from one quarter earlier. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their stakes considerably.

Of the funds we track, Legg Mason Capital Management, managed by Bill Miller, holds the biggest position in AFLAC Incorporated (NYSE:AFL). Legg Mason Capital Management has a $105 million position in the stock, comprising 1.8% of its 13F portfolio. Sitting at the No. 2 spot is Ken Griffin of Citadel Investment Group, with a $63 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedgies that are bullish include John W. Rogers’s Ariel Investments, Phill Gross and Robert Atchinson’s Adage Capital Management and Michael Messner’s Seminole Capital (Investment Mgmt).

Because AFLAC Incorporated (NYSE:AFL) has faced bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there is a sect of hedge funds who were dropping their full holdings at the end of the year. Interestingly, Robert Pohly’s Samlyn Capital dropped the largest stake of all the hedgies we monitor, valued at an estimated $21 million in stock.. Daniel S. Och’s fund, OZ Management, also cut its stock, about $3 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 3 funds at the end of the year.

How have insiders been trading AFLAC Incorporated (NYSE:AFL)?

Bullish insider trading is most useful when the primary stock in question has experienced transactions within the past six months. Over the latest half-year time period, AFLAC Incorporated (NYSE:AFL) has seen zero unique insiders purchasing, and 10 insider sales (see the details of insider trades here).

With the results shown by our studies, retail investors should always pay attention to hedge fund and insider trading activity, and AFLAC Incorporated (NYSE:AFL) shareholders fit into this picture quite nicely.

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