Do Hedge Funds Love StanCorp Financial Group, Inc. (SFG)?

Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.

StanCorp Financial Group, Inc. (NYSE:SFG) has seen an increase in activity from the world’s largest hedge funds of late. SFG was in 23 hedge funds’ portfolios at the end of the third quarter of 2015. There were 9 hedge funds in our database with SFG holdings at the end of the previous quarter. At the end of this article we will also compare SFG to other stocks including Seattle Genetics, Inc. (NASDAQ:SGEN), Cameco Corporation (USA) (NYSE:CCJ), and Michaels Companies Inc (NASDAQ:MIK) to get a better sense of its popularity.

With all of this in mind, let’s take a peek at the new action regarding StanCorp Financial Group, Inc. (NYSE:SFG).

Hedge fund activity in StanCorp Financial Group, Inc. (NYSE:SFG)

At the end of the third quarter, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 156% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Carlson Capital, managed by Clint Carlson, holds the biggest position in StanCorp Financial Group, Inc. (NYSE:SFG). Carlson Capital has a $91.9 million position in the stock, comprising 1.1% of its 13F portfolio. The second largest stake is held by Phill Gross and Robert Atchinson of Adage Capital Management, with a $72 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other professional money managers that are bullish contain Robert Emil Zoellner’s Alpine Associates, Alec Litowitz and Ross Laser’s Magnetar Capital and John Orrico’s Water Island Capital.

As aggregate interest increased, specific money managers have been driving this bullishness. Carlson Capital, managed by Clint Carlson, created the largest position in StanCorp Financial Group, Inc. (NYSE:SFG). Carlson Capital had $91.9 million invested in the company at the end of the quarter. Phill Gross and Robert Atchinson’s Adage Capital Management also initiated a $72 million position during the quarter. The other funds with new positions in the stock are Robert Emil Zoellner’s Alpine Associates, Alec Litowitz and Ross Laser’s Magnetar Capital, and John Orrico’s Water Island Capital.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as StanCorp Financial Group, Inc. (NYSE:SFG) but similarly valued. These stocks are Seattle Genetics, Inc. (NASDAQ:SGEN), Cameco Corporation (USA) (NYSE:CCJ), Michaels Companies Inc (NASDAQ:MIK), and Zillow Inc (NASDAQ:Z). This group of stocks’ market values are closest to SFG’s market value.

As you can see these stocks had an average of 21.75 hedge funds with bullish positions and the average amount invested in these stocks was $765 million. That figure was $438 million in SFG’s case. Zillow Inc (NASDAQ:Z) is the most popular stock in this table. On the other hand Seattle Genetics, Inc. (NASDAQ:SGEN) is the least popular one with only 21 bullish hedge fund positions. StanCorp Financial Group, Inc. (NYSE:SFG) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard Z might be a better candidate to consider a long position.