Hedge Funds Are Buying Cincinnati Financial Corporation (CINF)

Is it smart to be bullish on Cincinnati Financial Corporation (NASDAQ:CINF)?

In the financial world, there are tons of metrics market participants can use to monitor publicly traded companies. A duo of the most underrated are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top hedge fund managers can outperform the broader indices by a significant amount (see just how much).

Just as necessary, bullish insider trading sentiment is a second way to look at the world of equities. Obviously, there are a number of stimuli for a corporate insider to downsize shares of his or her company, but only one, very obvious reason why they would behave bullishly. Several academic studies have demonstrated the useful potential of this strategy if “monkeys” understand what to do (learn more here).

Now that that’s out of the way, let’s study the recent info for Cincinnati Financial Corporation (NASDAQ:CINF).

How have hedgies been trading Cincinnati Financial Corporation (NASDAQ:CINF)?

At Q2’s end, a total of 17 of the hedge funds we track held long positions in this stock, a change of 89% from the previous quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their stakes significantly.

When using filings from the hedgies we track, First Eagle Investment Management, managed by Matt McLennan, holds the biggest position in Cincinnati Financial Corporation (NASDAQ:CINF). First Eagle Investment Management has a $441.9 million position in the stock, comprising 1.3% of its 13F portfolio. Coming in second is David Harding of Winton Capital Management, with a $40.7 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Some other hedgies that are bullish include Ken Griffin’s Citadel Investment Group, Jim Simons’s Renaissance Technologies and Chuck Royce’s Royce & Associates.

As one would understandably expect, specific money managers were breaking ground themselves. First Eagle Investment Management, managed by Matt McLennan, created the most outsized position in Cincinnati Financial Corporation (NASDAQ:CINF). First Eagle Investment Management had 441.9 million invested in the company at the end of the quarter. David Harding’s Winton Capital Management also made a $40.7 million investment in the stock during the quarter. The following funds were also among the new CINF investors: Ken Griffin’s Citadel Investment Group, Jim Simons’s Renaissance Technologies, and Chuck Royce’s Royce & Associates.

Insider trading activity in Cincinnati Financial Corporation (NASDAQ:CINF)

Legal insider trading, particularly when it’s bullish, is best served when the company in question has experienced transactions within the past six months. Over the last 180-day time frame, Cincinnati Financial Corporation (NASDAQ:CINF) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to Cincinnati Financial Corporation (NASDAQ:CINF). These stocks are Alleghany Corporation (NYSE:Y), XL Group plc (NYSE:XL), Cna Financial Corp (NYSE:CNA), Arch Capital Group Ltd. (NASDAQ:ACGL), and Everest Re Group Ltd (NYSE:RE). This group of stocks are in the property & casualty insurance industry and their market caps match CINF’s market cap.