The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards RenaissanceRe Holdings Ltd. (NYSE:RNR).
Is RenaissanceRe Holdings Ltd. (NYSE:RNR) a buy, sell, or hold? Money managers are in a bullish mood. The number of long hedge fund positions increased by 7 recently. Our calculations also showed that RNR isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to take a glance at the recent hedge fund action encompassing RenaissanceRe Holdings Ltd. (NYSE:RNR).
How are hedge funds trading RenaissanceRe Holdings Ltd. (NYSE:RNR)?
Heading into the second quarter of 2020, a total of 30 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 30% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards RNR over the last 18 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Cliff Asness’s AQR Capital Management has the most valuable position in RenaissanceRe Holdings Ltd. (NYSE:RNR), worth close to $138 million, corresponding to 0.2% of its total 13F portfolio. Coming in second is Renaissance Technologies, holding a $122.4 million position; 0.1% of its 13F portfolio is allocated to the company. Other peers that are bullish consist of Ken Griffin’s Citadel Investment Group, Brian Ashford-Russell and Tim Woolley’s Polar Capital and Steve Cohen’s Point72 Asset Management. In terms of the portfolio weights assigned to each position Abrams Bison Investments allocated the biggest weight to RenaissanceRe Holdings Ltd. (NYSE:RNR), around 12.91% of its 13F portfolio. BlueMar Capital Management is also relatively very bullish on the stock, earmarking 7.23 percent of its 13F equity portfolio to RNR.
As one would reasonably expect, key hedge funds have been driving this bullishness. BlueMar Capital Management, managed by David Rodriguez-Fraile, created the biggest position in RenaissanceRe Holdings Ltd. (NYSE:RNR). BlueMar Capital Management had $16.1 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also made a $9.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Sander Gerber’s Hudson Bay Capital Management, Anthony Bozza’s Lakewood Capital Management, and Gregg Moskowitz’s Interval Partners.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as RenaissanceRe Holdings Ltd. (NYSE:RNR) but similarly valued. These stocks are Ionis Pharmaceuticals, Inc. (NASDAQ:IONS), Guardant Health, Inc. (NASDAQ:GH), Guidewire Software Inc (NYSE:GWRE), and ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD). This group of stocks’ market values match RNR’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.75 hedge funds with bullish positions and the average amount invested in these stocks was $1013 million. That figure was $676 million in RNR’s case. Guidewire Software Inc (NYSE:GWRE) is the most popular stock in this table. On the other hand Ionis Pharmaceuticals, Inc. (NASDAQ:IONS) is the least popular one with only 22 bullish hedge fund positions. RenaissanceRe Holdings Ltd. (NYSE:RNR) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but beat the market by 13.2 percentage points. Unfortunately RNR wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on RNR were disappointed as the stock returned 12.4% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.