Radian Group Inc (NYSE:RDN) has seen a decrease in hedge fund sentiment of late.
At the moment, there are dozens of indicators market participants can use to track Mr. Market. A pair of the best are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best hedge fund managers can outpace the S&P 500 by a healthy amount (see just how much).
Just as key, positive insider trading activity is another way to break down the investments you’re interested in. Obviously, there are a number of incentives for a bullish insider to sell shares of his or her company, but just one, very simple reason why they would behave bullishly. Plenty of empirical studies have demonstrated the market-beating potential of this tactic if shareholders understand where to look (learn more here).
With these “truths” under our belt, let’s take a gander at the latest action regarding Radian Group Inc (NYSE:RDN).
What does the smart money think about Radian Group Inc (NYSE:RDN)?
At the end of the fourth quarter, a total of 12 of the hedge funds we track were long in this stock, a change of 0% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their holdings significantly.
According to our comprehensive database, Regiment Capital, managed by Timothy S. Peterson, holds the largest position in Radian Group Inc (NYSE:RDN). Regiment Capital has a $24.4 million position in the stock, comprising 4.6% of its 13F portfolio. On Regiment Capital’s heels is John Paulson of Paulson & Co, with a $21.6 million position; 0.1% of its 13F portfolio is allocated to the company. Some other peers that hold long positions include Chuck Royce’s Royce & Associates, Thomas Lenox Kempner’s Davidson Kempner and Ken Grossman and Glen Schneider’s SG Capital Management.
Since Radian Group Inc (NYSE:RDN) has faced falling interest from the entirety of the hedge funds we track, we can see that there exists a select few hedgies who were dropping their entire stakes in Q4. At the top of the heap, Ken Heebner’s Capital Growth Management dumped the biggest stake of the “upper crust” of funds we track, totaling close to $3.9 million in stock., and Richard Schimel of Diamondback Capital was right behind this move, as the fund dumped about $1.8 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
What have insiders been doing with Radian Group Inc (NYSE:RDN)?
Insider buying is most useful when the company in focus has seen transactions within the past six months. Over the latest half-year time frame, Radian Group Inc (NYSE:RDN) has experienced 1 unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Radian Group Inc (NYSE:RDN). These stocks are Enstar Group Ltd. (NASDAQ:ESGR), Endurance Specialty Holdings Ltd. (NYSE:ENH), MBIA Inc. (NYSE:MBI), Kemper Corporation (NYSE:KMPR), and Platinum Underwriters Holdings, Ltd. (NYSE:PTP). This group of stocks are in the property & casualty insurance industry and their market caps resemble RDN’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Enstar Group Ltd. (NASDAQ:ESGR)||6||1||1|
|Endurance Specialty Holdings Ltd. (NYSE:ENH)||10||0||6|
|MBIA Inc. (NYSE:MBI)||25||0||0|
|Kemper Corporation (NYSE:KMPR)||5||0||2|
|Platinum Underwriters Holdings, Ltd. (NYSE:PTP)||14||1||4|
With the returns shown by the aforementioned research, retail investors must always watch hedge fund and insider trading sentiment, and Radian Group Inc (NYSE:RDN) applies perfectly to this mantra.