Is Erie Indemnity Company (NASDAQ:ERIE) a good investment?
In the financial world, there are many methods investors can use to analyze Mr. Market. A couple of the most innovative are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite investment managers can outclass their index-focused peers by a superb amount (see just how much).
Just as key, optimistic insider trading activity is another way to look at the marketplace. Obviously, there are many stimuli for a bullish insider to downsize shares of his or her company, but just one, very clear reason why they would behave bullishly. Various academic studies have demonstrated the useful potential of this tactic if shareholders know what to do (learn more here).
Keeping this in mind, let’s discuss the latest info for Erie Indemnity Company (NASDAQ:ERIE).
How are hedge funds trading Erie Indemnity Company (NASDAQ:ERIE)?
Heading into Q3, a total of 6 of the hedge funds we track held long positions in this stock, a change of -14% from one quarter earlier. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were boosting their stakes significantly.
When using filings from the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the most valuable position in Erie Indemnity Company (NASDAQ:ERIE). Royce & Associates has a $79.9 million position in the stock, comprising 0.2% of its 13F portfolio. Sitting at the No. 2 spot is D. E. Shaw of D E Shaw, with a $8.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds with similar optimism include Jim Simons’s Renaissance Technologies, Ken Griffin’s Citadel Investment Group and Joel Greenblatt’s Gotham Asset Management.
Judging by the fact that Erie Indemnity Company (NASDAQ:ERIE) has experienced declining interest from upper-tier hedge fund managers, it’s easy to see that there lies a certain “tier” of hedgies that decided to sell off their entire stakes last quarter. At the top of the heap, Matthew Tewksbury’s Stevens Capital Management dropped the largest stake of the “upper crust” of funds we key on, comprising an estimated $0.2 million in stock. Ben Levine Andrew Manuel and Stefan Renold’s fund, LMR Partners, also said goodbye to its stock, about $0.2 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 1 funds last quarter.
Insider trading activity in Erie Indemnity Company (NASDAQ:ERIE)
Insider buying is particularly usable when the company we’re looking at has experienced transactions within the past six months. Over the last 180-day time period, Erie Indemnity Company (NASDAQ:ERIE) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll check out the relationship between both of these indicators in other stocks similar to Erie Indemnity Company (NASDAQ:ERIE). These stocks are Aon PLC (NYSE:AON), National Financial Partners Corp. (NYSE:NFP), Willis Group Holdings PLC (NYSE:WSH), Arthur J. Gallagher & Co. (NYSE:AJG), and Brown & Brown, Inc. (NYSE:BRO). All of these stocks are in the insurance brokers industry and their market caps resemble ERIE’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Aon PLC (NYSE:AON)||32||0||0|
|National Financial Partners Corp. (NYSE:NFP)||19||0||0|
|Willis Group Holdings PLC (NYSE:WSH)||19||0||0|
|Arthur J. Gallagher & Co. (NYSE:AJG)||21||0||0|
|Brown & Brown, Inc. (NYSE:BRO)||25||0||0|
Using the results explained by the previously mentioned research, regular investors must always pay attention to hedge fund and insider trading sentiment, and Erie Indemnity Company (NASDAQ:ERIE) applies perfectly to this mantra.