Hedge Funds Are Crazy About American Financial Group (AFG)

American Financial Group (NYSE:AFG) investors should pay attention to an increase in enthusiasm from smart money recently.

In today’s marketplace, there are tons of metrics investors can use to analyze the equity markets. A couple of the most under-the-radar are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the elite hedge fund managers can trounce the broader indices by a healthy amount (see just how much).

Just as key, optimistic insider trading sentiment is a second way to parse down the stock market universe. Obviously, there are a variety of stimuli for an upper level exec to sell shares of his or her company, but only one, very clear reason why they would initiate a purchase. Plenty of academic studies have demonstrated the market-beating potential of this strategy if you know what to do (learn more here).

Now, it’s important to take a glance at the latest action encompassing American Financial Group (NYSE:AFG).

How are hedge funds trading American Financial Group (NYSE:AFG)?

In preparation for this quarter, a total of 13 of the hedge funds we track were bullish in this stock, a change of 18% from the previous quarter. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their stakes significantly.

According to our comprehensive database, Ken Griffin’s Citadel Investment Group had the largest position in American Financial Group (NYSE:AFG), worth close to $63.3 million, comprising 0.1% of its total 13F portfolio. The second largest stake is held by Cliff Asness of AQR Capital Management, with a $43.7 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other hedge funds with similar optimism include Anand Parekh’s Alyeska Investment Group, Israel Englander’s Millennium Management and John Overdeck and David Siegel’s Two Sigma Advisors.

Consequently, specific money managers have jumped into American Financial Group (NYSE:AFG) headfirst. Alyeska Investment Group, managed by Anand Parekh, assembled the largest position in American Financial Group (NYSE:AFG). Alyeska Investment Group had 10.7 million invested in the company at the end of the quarter. Ken Gray and Steve Walsh’s Bryn Mawr Capital also initiated a $1.2 million position during the quarter. The only other fund with a new position in the stock is D. E. Shaw’s D E Shaw.

How have insiders been trading American Financial Group (NYSE:AFG)?

Insider buying is at its handiest when the company we’re looking at has experienced transactions within the past 180 days. Over the last six-month time frame, American Financial Group (NYSE:AFG) has experienced zero unique insiders purchasing, and 9 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to American Financial Group (NYSE:AFG). These stocks are White Mountains Insurance Group Ltd (NYSE:WTM), Markel Corporation (NYSE:MKL), RenaissanceRe Holdings Ltd. (NYSE:RNR), Validus Holdings, Ltd. (NYSE:VR), and HCC Insurance Holdings, Inc. (NYSE:HCC). This group of stocks are the members of the property & casualty insurance industry and their market caps are closest to AFG’s market cap.