Is it smart to be bullish on Greenlight Capital Re, Ltd. (NASDAQ:GLRE)?
In the eyes of many traders, hedge funds are seen as delayed, old investment tools of a forgotten age. Although there are more than 8,000 hedge funds trading currently, this site focuses on the masters of this club, around 525 funds. Analysts calculate that this group oversees most of the smart money’s total assets, and by paying attention to their best picks, we’ve uncovered a number of investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we‘ve began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).
Equally as crucial, optimistic insider trading sentiment is another way to analyze the world of equities. As the old adage goes: there are lots of motivations for a bullish insider to cut shares of his or her company, but only one, very simple reason why they would initiate a purchase. Various empirical studies have demonstrated the impressive potential of this tactic if “monkeys” know what to do (learn more here).
Now that that’s out of the way, let’s discuss the recent info for Greenlight Capital Re, Ltd. (NASDAQ:GLRE).
What have hedge funds been doing with Greenlight Capital Re, Ltd. (NASDAQ:GLRE)?
In preparation for the third quarter, a total of 12 of the hedge funds we track were long in this stock, a change of -8% from one quarter earlier. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings considerably.
Out of the hedge funds we follow, Diamond Hill Capital, managed by Ric Dillon, holds the most valuable position in Greenlight Capital Re, Ltd. (NASDAQ:GLRE). Diamond Hill Capital has a $22.7 million position in the stock, comprising 0.2% of its 13F portfolio. On Diamond Hill Capital’s heels is Vertex One Asset Management, managed by John Thiessen, which held a $16.5 million position; 2.8% of its 13F portfolio is allocated to the company. Remaining peers that are bullish include Chuck Royce’s Royce & Associates, Murray Stahl’s Horizon Asset Management and Yale M. Fergang and Robert W. Medway’s Royal Capital.
As Greenlight Capital Re, Ltd. (NASDAQ:GLRE) has witnessed declining interest from the top-tier hedge fund industry, logic holds that there exists a select few hedge funds that slashed their positions entirely at the end of the second quarter. Intriguingly, Jim Simons’s Renaissance Technologies said goodbye to the biggest investment of all the hedgies we track, valued at an estimated $2.5 million in stock, and Israel Englander of Millennium Management was right behind this move, as the fund dropped about $2.1 million worth. These transactions are interesting, as total hedge fund interest dropped by 1 funds at the end of the second quarter.
How are insiders trading Greenlight Capital Re, Ltd. (NASDAQ:GLRE)?
Bullish insider trading is best served when the company in focus has seen transactions within the past 180 days. Over the last half-year time frame, Greenlight Capital Re, Ltd. (NASDAQ:GLRE) has experienced 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 Greenlight Capital Re, Ltd. (NASDAQ:GLRE). These stocks are Argo Group International Holdings, Ltd. (NASDAQ:AGII), MGIC Investment Corp. (NYSE:MTG), FBL Financial Group (NYSE:FFG), Horace Mann Educators Corporation (NYSE:HMN), and The Navigators Group, Inc (NASDAQ:NAVG). This group of stocks belong to the property & casualty insurance industry and their market caps match GLRE’s market cap.