Is Horace Mann Educators Corporation (NYSE:HMN) a sound stock to buy now? Hedge funds are taking an optimistic view. The number of long hedge fund bets went up by 2 recently.
In the eyes of most shareholders, hedge funds are assumed to be slow, old financial tools of the past. While there are more than 8000 funds trading at the moment, we at Insider Monkey look at the top tier of this club, around 450 funds. Most estimates calculate that this group controls the lion’s share of the hedge fund industry’s total capital, and by tracking their top picks, we have brought to light a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outstripped 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 topped the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).
Equally as important, bullish insider trading sentiment is a second way to parse down the marketplace. As the old adage goes: there are a variety of stimuli for an insider to sell shares of his or her company, but only one, very simple reason why they would buy. Plenty of empirical studies have demonstrated the valuable potential of this strategy if shareholders know what to do (learn more here).
With all of this in mind, let’s take a gander at the latest action encompassing Horace Mann Educators Corporation (NYSE:HMN).
How have hedgies been trading Horace Mann Educators Corporation (NYSE:HMN)?
At year’s end, a total of 9 of the hedge funds we track were bullish in this stock, a change of 29% from the third quarter. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were increasing their holdings significantly.
According to our comprehensive database, AQR Capital Management, managed by Cliff Asness, holds the most valuable position in Horace Mann Educators Corporation (NYSE:HMN). AQR Capital Management has a $21.1 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Ariel Investments, managed by John W. Rogers, which held a $8.3 million position; 0.2% of its 13F portfolio is allocated to the company. Other hedge funds that are bullish include Ken Fisher’s Fisher Asset Management, Israel Englander’s Millennium Management and D. E. Shaw’s D E Shaw.
As one would reasonably expect, some big names have jumped into Horace Mann Educators Corporation (NYSE:HMN) headfirst. D E Shaw, managed by D. E. Shaw, created the largest position in Horace Mann Educators Corporation (NYSE:HMN). D E Shaw had 0.7 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Mike Vranos’s Ellington and Paul Tudor Jones’s Tudor Investment Corp.
How have insiders been trading Horace Mann Educators Corporation (NYSE:HMN)?
Insider purchases made by high-level executives is particularly usable when the company in focus has experienced transactions within the past six months. Over the last half-year time frame, Horace Mann Educators Corporation (NYSE:HMN) has seen zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Horace Mann Educators Corporation (NYSE:HMN). These stocks are Employers Holdings, Inc. (NYSE:EIG), Safety Insurance Group, Inc. (NASDAQ:SAFT), Greenlight Capital Re, Ltd. (NASDAQ:GLRE), Maiden Holdings, Ltd. (NASDAQ:MHLD), and The Navigators Group, Inc (NASDAQ:NAVG). This group of stocks belong to the property & casualty insurance industry and their market caps match HMN’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Employers Holdings, Inc. (NYSE:EIG) | 4 | 0 | 2 |
| Safety Insurance Group, Inc. (NASDAQ:SAFT) | 4 | 0 | 1 |
| Greenlight Capital Re, Ltd. (NASDAQ:GLRE) | 13 | 0 | 4 |
| Maiden Holdings, Ltd. (NASDAQ:MHLD) | 12 | 0 | 0 |
| The Navigators Group, Inc (NASDAQ:NAVG) | 6 | 0 | 0 |
With the returns exhibited by the aforementioned research, retail investors must always monitor hedge fund and insider trading sentiment, and Horace Mann Educators Corporation (NYSE:HMN) is no exception.
