In the eyes of most traders, hedge funds are seen as underperforming, old financial tools of yesteryear. While there are more than 8000 funds trading today, we at Insider Monkey hone in on the leaders of this group, about 450 funds. Most estimates calculate that this group oversees most of the hedge fund industry’s total asset base, and by monitoring their top investments, we have brought to light a number of investment strategies that have historically outpaced the broader indices. Our small-cap hedge fund strategy outstripped 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 outperformed the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Just as beneficial, positive insider trading activity is a second way to parse down the world of equities. Obviously, there are many stimuli for an insider to drop shares of his or her company, but only one, very clear reason why they would buy. Many academic studies have demonstrated the useful potential of this strategy if piggybackers understand where to look (learn more here).
Consequently, it’s important to take a peek at the latest action surrounding Amtrust Financial Services, Inc. (NASDAQ:AFSI).
How have hedgies been trading Amtrust Financial Services, Inc. (NASDAQ:AFSI)?
At Q1’s end, a total of 8 of the hedge funds we track held long positions in this stock, a change of -27% from the previous quarter. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings meaningfully.
When looking at the hedgies we track, HBK Investments, managed by David Costen Haley, holds the largest position in Amtrust Financial Services, Inc. (NASDAQ:AFSI). HBK Investments has a $3.6 million position in the stock, comprising 0.1% of its 13F portfolio. On HBK Investments’s heels is Jay Petschek and Steven Major of Corsair Capital Management, with a $2.3 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Other hedge funds with similar optimism include Jim Simons’s Renaissance Technologies, Chuck Royce’s Royce & Associates and Matthew Hulsizer’s PEAK6 Capital Management.
Because Amtrust Financial Services, Inc. (NASDAQ:AFSI) has witnessed falling interest from hedge fund managers, it’s safe to say that there exists a select few money managers who were dropping their positions entirely at the end of the first quarter. It’s worth mentioning that Murray Stahl’s Horizon Asset Management dropped the largest stake of all the hedgies we watch, comprising an estimated $3.5 million in stock.. Israel Englander’s fund, Millennium Management, also dropped its stock, about $1.7 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 3 funds at the end of the first quarter.
What have insiders been doing with Amtrust Financial Services, Inc. (NASDAQ:AFSI)?
Bullish insider trading is particularly usable when the primary stock in question has experienced transactions within the past half-year. Over the last 180-day time frame, Amtrust Financial Services, Inc. (NASDAQ:AFSI) has seen zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Amtrust Financial Services, Inc. (NASDAQ:AFSI). These stocks are Enstar Group Ltd. (NASDAQ:ESGR), Mercury General Corporation (NYSE:MCY), Corelogic Inc (NYSE:CLGX), The Hanover Insurance Group, Inc. (NYSE:THG), and American National Insurance Company (NASDAQ:ANAT). This group of stocks are in the property & casualty insurance industry and their market caps are closest to AFSI’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Enstar Group Ltd. (NASDAQ:ESGR) | 8 | 1 | 3 |
| Mercury General Corporation (NYSE:MCY) | 8 | 0 | 3 |
| Corelogic Inc (NYSE:CLGX) | 23 | 1 | 2 |
| The Hanover Insurance Group, Inc. (NYSE:THG) | 10 | 0 | 5 |
| American National Insurance Company (NASDAQ:ANAT) | 8 | 1 | 0 |
With the returns demonstrated by our time-tested strategies, everyday investors should always keep an eye on hedge fund and insider trading sentiment, and Amtrust Financial Services, Inc. (NASDAQ:AFSI) shareholders fit into this picture quite nicely.
