Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that’s why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to smartest analysts and expensive data/information sources that individual investors can’t match. So should one consider investing in ACE Limited (NYSE:ACE)? The smart money sentiment can provide an answer to this question.
ACE Limited investors should be aware of an increase in activity from the world’s largest hedge funds recently. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Luxottica Group SpA (ADR) (NYSE:LUX), VMware, Inc. (NYSE:VMW), and Raytheon Company (NYSE:RTN) to gather more data points.
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In the eyes of most traders, hedge funds are perceived as worthless, outdated investment vehicles of years past. While there are greater than 8000 funds trading today, We choose to focus on the crème de la crème of this club, around 700 funds. These money managers have their hands on most of the smart money’s total capital, and by following their finest picks, Insider Monkey has brought to light numerous investment strategies that have historically outpaced the market. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points a year for a decade in their back tests.
With all of this in mind, let’s view the fresh action regarding ACE Limited (NYSE:ACE).
What have hedge funds been doing with ACE Limited (NYSE:ACE)?
At the Q3’s end, a total of 37 of the hedge funds tracked by Insider Monkey were long this stock, a change of 16% from the previous quarter. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, John A. Levin’s Levin Capital Strategies has the number one position in ACE Limited (NYSE:ACE), worth close to $160.1 million, accounting for 2.7% of its total 13F portfolio. Coming in second is Citadel Investment Group, led by Ken Griffin, holding a $158.2 million position; 0.2% of its 13F portfolio is allocated to the stock. Other members of the smart money that hold long positions comprise Andreas Halvorsen’s Viking Global and David Harding’s Winton Capital Management.