Alleghany Corporation (Y): Insiders Are Buying, Should You?

Is Alleghany Corporation (NYSE:Y) a healthy stock for your portfolio? Hedge funds are selling. The number of long hedge fund positions dropped by 4 lately.

In today’s marketplace, there are dozens of metrics market participants can use to watch Mr. Market. Some of the most useful are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best hedge fund managers can beat the broader indices by a very impressive margin (see just how much).

Just as important, optimistic insider trading sentiment is another way to break down the investments you’re interested in. Obviously, there are lots of stimuli for a bullish insider to cut shares of his or her company, but only one, very clear reason why they would behave bullishly. Plenty of empirical studies have demonstrated the impressive potential of this strategy if shareholders understand what to do (learn more here).

Consequently, let’s take a peek at the key action encompassing Alleghany Corporation (NYSE:Y).

What does the smart money think about Alleghany Corporation (NYSE:Y)?

At Q1’s end, a total of 23 of the hedge funds we track held long positions in this stock, a change of -15% from the first quarter.

Seeing as Alleghany Corporation (NYSE:Y) has experienced falling interest from hedge fund managers, it’s easy to see that there were a few money managers that slashed their entire stakes at the end of the first quarter. It’s worth mentioning that Glenn Russell Dubin’s Highbridge Capital Management cut the largest investment of all the hedgies we track, valued at about $4.8 million in stock, and Jim Simons of Renaissance Technologies was right behind this move, as the fund said goodbye to about $1.5 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 4 funds at the end of the first quarter.

How have insiders been trading Alleghany Corporation (NYSE:Y)?

Insider trading activity, especially when it’s bullish, is particularly usable when the company in focus has seen transactions within the past six months. Over the last six-month time frame, Alleghany Corporation (NYSE:Y) has seen 1 unique insiders buying, and 2 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Alleghany Corporation (NYSE:Y). These stocks are Partnerre Ltd (NYSE:PRE), Everest Re Group Ltd (NYSE:RE), Cincinnati Financial Corporation (NASDAQ:CINF), W.R. Berkley Corporation (NYSE:WRB), and Arch Capital Group Ltd. (NASDAQ:ACGL). This group of stocks are in the property & casualty insurance industry and their market caps are closest to Y’s market cap.

With the returns exhibited by Insider Monkey’s research, everyday investors must always keep an eye on hedge fund and insider trading sentiment, and Alleghany Corporation (NYSE:Y) applies perfectly to this mantra.

Click here to learn why you should track hedge funds