Safety Insurance Group, Inc. (SAFT): Are Hedge Funds Right About This Stock?

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Safety Insurance Group, Inc. (NASDAQ:SAFT) investors should pay attention to an increase in activity from the world’s largest hedge funds lately.

In the eyes of most shareholders, hedge funds are seen as unimportant, old financial vehicles of years past. While there are greater than 8000 funds trading at present, we at Insider Monkey hone in on the moguls of this club, around 450 funds. It is estimated that this group controls the lion’s share of the smart money’s total capital, and by watching their best investments, we have deciphered a number of investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum 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 outpaced the S&P 500 index by 23.3 percentage points in 8 months (see the details here).


Just as integral, positive insider trading activity is another way to break down the financial markets. Obviously, there are a number of stimuli for a bullish insider to downsize shares of his or her company, but just one, very clear reason why they would initiate a purchase. Plenty of academic studies have demonstrated the valuable potential of this strategy if piggybackers know what to do (learn more here).

Keeping this in mind, it’s important to take a glance at the key action encompassing Safety Insurance Group, Inc. (NASDAQ:SAFT).

Hedge fund activity in Safety Insurance Group, Inc. (NASDAQ:SAFT)

At the end of the first quarter, a total of 9 of the hedge funds we track were long in this stock, a change of 125% from the first quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their holdings considerably.

According to our comprehensive database, Raymond J. Harbert’s Harbert Management had the biggest position in Safety Insurance Group, Inc. (NASDAQ:SAFT), worth close to $9.8 million, accounting for 6.4% of its total 13F portfolio. On Harbert Management’s heels is Millennium Management, managed by Israel Englander, which held a $1.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining peers that are bullish include Cliff Asness’s AQR Capital Management, Whitney Tilson’s T2 Partners and Ken Griffin’s Citadel Investment Group.

With a general bullishness amongst the heavyweights, key money managers were leading the bulls’ herd. Millennium Management, managed by Israel Englander, initiated the most outsized position in Safety Insurance Group, Inc. (NASDAQ:SAFT). Millennium Management had 1.5 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also made a $0.3 million investment in the stock during the quarter. The other funds with brand new SAFT positions are Steven Cohen’s SAC Capital Advisors, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Chuck Royce’s Royce & Associates.

What have insiders been doing with Safety Insurance Group, Inc. (NASDAQ:SAFT)?

Bullish insider trading is best served when the company we’re looking at has seen transactions within the past half-year. Over the latest 180-day time frame, Safety Insurance Group, Inc. (NASDAQ:SAFT) has experienced zero unique insiders buying, and 2 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Safety Insurance Group, Inc. (NASDAQ:SAFT). These stocks are The Navigators Group, Inc (NASDAQ:NAVG), Horace Mann Educators Corporation (NYSE:HMN), State Auto Financial (NASDAQ:STFC), Employers Holdings, Inc. (NYSE:EIG), and Maiden Holdings, Ltd. (NASDAQ:MHLD). All of these stocks are in the property & casualty insurance industry and their market caps are closest to SAFT’s market cap.

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