Do Hedge Funds and Insiders Love Endurance Specialty Holdings Ltd. (ENH)?

Endurance Specialty Holdings Ltd. (NYSE:ENH) was in 12 hedge funds’ portfolio at the end of March. ENH investors should pay attention to an increase in hedge fund interest recently. There were 11 hedge funds in our database with ENH positions at the end of the previous quarter.

In the eyes of most shareholders, hedge funds are viewed as underperforming, outdated investment tools of the past. While there are greater than 8000 funds with their doors open at the moment, we hone in on the moguls of this group, close to 450 funds. It is estimated that this group controls most of the smart money’s total capital, and by watching their best picks, we have come up with a few investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy beat 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 trumped the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Just as beneficial, positive insider trading sentiment is another way to parse down the financial markets. As the old adage goes: there are a variety of reasons for an executive to drop shares of his or her company, but just one, very obvious reason why they would buy. Plenty of academic studies have demonstrated the valuable potential of this method if “monkeys” understand what to do (learn more here).

Now, let’s take a peek at the key action encompassing Endurance Specialty Holdings Ltd. (NYSE:ENH).

What does the smart money think about Endurance Specialty Holdings Ltd. (NYSE:ENH)?

Heading into Q2, a total of 12 of the hedge funds we track were bullish in this stock, a change of 9% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their stakes considerably.

When looking at the hedgies we track, David Dreman’s Dreman Value Management had the largest position in Endurance Specialty Holdings Ltd. (NYSE:ENH), worth close to $27.1 million, accounting for 0.7% of its total 13F portfolio. Sitting at the No. 2 spot is Cliff Asness of AQR Capital Management, with a $9.3 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other hedgies with similar optimism include Brian Taylor’s Pine River Capital Management, Israel Englander’s Millennium Management and Jim Simons’s Renaissance Technologies.

Now, key hedge funds have jumped into Endurance Specialty Holdings Ltd. (NYSE:ENH) headfirst. AQR Capital Management, managed by Cliff Asness, assembled the most outsized position in Endurance Specialty Holdings Ltd. (NYSE:ENH). AQR Capital Management had 9.3 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $4.8 million investment in the stock during the quarter. The other funds with brand new ENH positions are Eric D. Hovde’s Hovde Capital, David Costen Haley’s HBK Investments, and Ken Griffin’s Citadel Investment Group.

Insider trading activity in Endurance Specialty Holdings Ltd. (NYSE:ENH)

Insider purchases made by high-level executives is most useful when the company in question has seen transactions within the past half-year. Over the latest 180-day time period, Endurance Specialty Holdings Ltd. (NYSE:ENH) has seen zero unique insiders purchasing, and 6 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Endurance Specialty Holdings Ltd. (NYSE:ENH). These stocks are Kemper Corporation (NYSE:KMPR), The Hanover Insurance Group, Inc. (NYSE:THG), MBIA Inc. (NYSE:MBI), Mercury General Corporation (NYSE:MCY), and Enstar Group Ltd. (NASDAQ:ESGR). All of these stocks are in the property & casualty insurance industry and their market caps are similar to ENH’s market cap.