Hedge Funds Are Crazy About ACE Limited (ACE)

ACE Limited (NYSE:ACE) has seen an increase in activity from the world’s largest hedge funds of late.

According to most traders, hedge funds are viewed as slow, old investment tools of the past. While there are greater than 8000 funds trading today, we at Insider Monkey choose to focus on the moguls of this group, close to 450 funds. Most estimates calculate that this group oversees the majority of the smart money’s total asset base, and by tracking their best stock picks, we have revealed a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (see the details here).

Equally as beneficial, positive insider trading sentiment is another way to break down the financial markets. There are many motivations for a bullish insider to sell shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Several academic studies have demonstrated the useful potential of this tactic if you understand what to do (learn more here).

Now, let’s take a glance at the key action encompassing ACE Limited (NYSE:ACE).

What does the smart money think about ACE Limited (NYSE:ACE)?

At the end of the first quarter, a total of 31 of the hedge funds we track held long positions in this stock, a change of 19% from the previous quarter. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were increasing their holdings significantly.

When looking at the hedgies we track, Citadel Investment Group, managed by Ken Griffin, holds the biggest position in ACE Limited (NYSE:ACE). Citadel Investment Group has a $207.8 million position in the stock, comprising 0.3% of its 13F portfolio. Coming in second is Viking Global, managed by Andreas Halvorsen, which held a $197.7 million position; the fund has 1.2% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Phill Gross and Robert Atchinson’s Adage Capital Management, Russell Hawkins’s Hawkins Capital and Clint Carlson’s Carlson Capital.

As one would reasonably expect, key money managers were breaking ground themselves. AQR Capital Management, managed by Cliff Asness, established the largest position in ACE Limited (NYSE:ACE). AQR Capital Management had 64.1 million invested in the company at the end of the quarter. Matthew Tewksbury’s Stevens Capital Management also made a $6.2 million investment in the stock during the quarter. The following funds were also among the new ACE investors: John Overdeck and David Siegel’s Two Sigma Advisors, David Costen Haley’s HBK Investments, and Alec Litowitz and Ross Laser’s Magnetar Capital.

What have insiders been doing with ACE Limited (NYSE:ACE)?

Insider purchases made by high-level executives is particularly usable when the primary stock in question has seen transactions within the past half-year. Over the latest 180-day time period, ACE Limited (NYSE:ACE) has experienced zero unique insiders buying, and 7 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to ACE Limited (NYSE:ACE). These stocks are American International Group Inc (NYSE:AIG), Loews Corporation (NYSE:L), The Chubb Corporation (NYSE:CB), The Allstate Corporation (NYSE:ALL), and Travelers Companies Inc (NYSE:TRV). This group of stocks are in the property & casualty insurance industry and their market caps are closest to ACE’s market cap.