Loews Corporation (NYSE:L) has seen an increase in activity from the world’s largest hedge funds lately.
According to most market participants, hedge funds are viewed as worthless, old financial vehicles of yesteryear. While there are greater than 8000 funds with their doors open at present, we look at the top tier of this group, about 450 funds. It is estimated that this group has its hands on most of all hedge funds’ total capital, and by monitoring their highest performing equity investments, we have unsheathed a few investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually 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 beaten the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).
Just as beneficial, positive insider trading sentiment is a second way to parse down the world of equities. Just as you’d expect, there are a number of motivations for an upper level exec to drop shares of his or her company, but just one, very simple reason why they would buy. Various academic studies have demonstrated the market-beating potential of this method if you understand what to do (learn more here).
Keeping this in mind, we’re going to take a gander at the recent action surrounding Loews Corporation (NYSE:L).
What have hedge funds been doing with Loews Corporation (NYSE:L)?
At year’s end, a total of 24 of the hedge funds we track were long in this stock, a change of 20% from the third quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes meaningfully.
Of the funds we track, Mason Hawkins’s Southeastern Asset Management had the largest position in Loews Corporation (NYSE:L), worth close to $1.536 billion, accounting for 6.7% of its total 13F portfolio. The second largest stake is held by Boykin Curry of Eagle Capital Management, with a $427 million position; the fund has 3% of its 13F portfolio invested in the stock. Some other hedgies with similar optimism include Cliff Asness’s AQR Capital Management, Ken Griffin’s Citadel Investment Group and Jim Simons’s Renaissance Technologies.
As one would reasonably expect, specific money managers have been driving this bullishness. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, initiated the biggest position in Loews Corporation (NYSE:L). Arrowstreet Capital had 4 million invested in the company at the end of the quarter. Steven Cohen’s SAC Capital Advisors also initiated a $1 million position during the quarter. The other funds with new positions in the stock are Gifford Combs’s Dalton Investments and Glenn Russell Dubin’s Highbridge Capital Management.
What have insiders been doing with Loews Corporation (NYSE:L)?
Bullish insider trading is particularly usable when the company in question has experienced transactions within the past half-year. Over the last half-year time frame, Loews Corporation (NYSE:L) has seen 1 unique insiders purchasing, and 11 insider sales (see the details of insider trades here).
With the results exhibited by Insider Monkey’s strategies, everyday investors should always keep an eye on hedge fund and insider trading sentiment, and Loews Corporation (NYSE:L) applies perfectly to this mantra.
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.