The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. Hedge funds’ consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn’t been kind to hedge funds. In this article we look at how hedge funds traded Reinsurance Group of America Inc (NYSE:RGA) and determine whether the smart money was really smart about this stock.
Reinsurance Group of America Inc (NYSE:RGA) shareholders have witnessed an increase in support from the world’s most elite money managers lately. Reinsurance Group of America Inc (NYSE:RGA) was in 32 hedge funds’ portfolios at the end of September. The all time high for this statistic is 33. There were 28 hedge funds in our database with RGA holdings at the end of June. Our calculations also showed that RGA isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now let’s take a look at the recent hedge fund action surrounding Reinsurance Group of America Inc (NYSE:RGA).
Richard S. Pzena of Pzena Investment Management
Do Hedge Funds Think RGA Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 32 of the hedge funds tracked by Insider Monkey were long this stock, a change of 14% from the previous quarter. On the other hand, there were a total of 31 hedge funds with a bullish position in RGA a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Millennium Management was the largest shareholder of Reinsurance Group of America Inc (NYSE:RGA), with a stake worth $75.1 million reported as of the end of September. Trailing Millennium Management was Citadel Investment Group, which amassed a stake valued at $69 million. Polar Capital, Pzena Investment Management, and Balyasny Asset Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Invenomic Capital Management allocated the biggest weight to Reinsurance Group of America Inc (NYSE:RGA), around 2.51% of its 13F portfolio. Prana Capital Management is also relatively very bullish on the stock, designating 1.23 percent of its 13F equity portfolio to RGA.
As one would reasonably expect, specific money managers have been driving this bullishness. Point72 Asset Management, managed by Steve Cohen, created the most outsized position in Reinsurance Group of America Inc (NYSE:RGA). Point72 Asset Management had $7.4 million invested in the company at the end of the quarter. Daniel Johnson’s Gillson Capital also made a $5.8 million investment in the stock during the quarter. The following funds were also among the new RGA investors: Michael Gelband’s ExodusPoint Capital, Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, and Allon Hellmann’s Full18 Capital.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Reinsurance Group of America Inc (NYSE:RGA) but similarly valued. These stocks are Cullen/Frost Bankers, Inc. (NYSE:CFR), Vipshop Holdings Limited (NYSE:VIPS), Tandem Diabetes Care Inc (NASDAQ:TNDM), Endeavor Group Holdings, Inc. (NYSE:EDR), BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ), Autoliv Inc. (NYSE:ALV), and YETI Holdings, Inc. (NYSE:YETI). This group of stocks’ market valuations match RGA’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CFR | 13 | 92869 | 0 |
| VIPS | 30 | 560211 | -6 |
| TNDM | 31 | 287129 | -1 |
| EDR | 20 | 3930122 | 20 |
| BJ | 24 | 129524 | 7 |
| ALV | 19 | 761532 | -4 |
| YETI | 29 | 255906 | -5 |
| Average | 23.7 | 859613 | 1.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.7 hedge funds with bullish positions and the average amount invested in these stocks was $860 million. That figure was $452 million in RGA’s case. Tandem Diabetes Care Inc (NASDAQ:TNDM) is the most popular stock in this table. On the other hand Cullen/Frost Bankers, Inc. (NYSE:CFR) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Reinsurance Group of America Inc (NYSE:RGA) is more popular among hedge funds. Our overall hedge fund sentiment score for RGA is 88.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and still managed to beat the market by another 3.6 percentage points. Hedge funds were somewhat right about betting on RGA as the stock returned 3.9% since the end of September (through January 31st) and outperformed the top 5 hedge fund stocks but not the market. This is a rare phenomenon as top hedge fund stocks usually beat the market over the long-term.
Follow Reinsurance Group Of America Inc (NYSE:RGA)
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Disclosure: None. This article was originally published at Insider Monkey.
