Enstar Group Ltd. (NASDAQ:ESGR) shareholders have witnessed a decrease in hedge fund interest in recent months.
According to most investors, hedge funds are seen as unimportant, old financial vehicles of the past. While there are over 8000 funds trading at present, we at Insider Monkey look at the crème de la crème of this group, around 450 funds. It is widely believed that this group has its hands on the lion’s share of the smart money’s total asset base, and by tracking their top stock picks, we have figured out a number of investment strategies that have historically outstripped Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually 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 24 percentage points in 7 months (see the details here).
Equally as beneficial, positive insider trading activity is another way to break down the investments you’re interested in. Obviously, there are many reasons for an insider to sell shares of his or her company, but just one, very simple reason why they would initiate a purchase. Many academic studies have demonstrated the market-beating potential of this strategy if “monkeys” know where to look (learn more here).
Now, we’re going to take a gander at the key action regarding Enstar Group Ltd. (NASDAQ:ESGR).
How have hedgies been trading Enstar Group Ltd. (NASDAQ:ESGR)?
Heading into 2013, a total of 6 of the hedge funds we track held long positions in this stock, a change of 0% from the previous quarter. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes substantially.
According to our comprehensive database, Akre Capital Management, managed by Charles Akre, holds the most valuable position in Enstar Group Ltd. (NASDAQ:ESGR). Akre Capital Management has a $56.6 million position in the stock, comprising 4% of its 13F portfolio. Sitting at the No. 2 spot is Royce & Associates, managed by Chuck Royce, which held a $15.9 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedge funds that are bullish include Zeke Ashton’s Centaur Capital Partners, Jim Simons’s Renaissance Technologies and Murray Stahl’s Horizon Asset Management.
Judging by the fact that Enstar Group Ltd. (NASDAQ:ESGR) has experienced falling interest from the entirety of the hedge funds we track, logic holds that there lies a certain “tier” of money managers that decided to sell off their full holdings in Q4. It’s worth mentioning that Cliff Asness’s AQR Capital Management dropped the biggest investment of the 450+ funds we key on, comprising about $0.4 million in stock. These bearish behaviors are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Insider trading activity in Enstar Group Ltd. (NASDAQ:ESGR)
Bullish insider trading is most useful when the company in question has experienced transactions within the past six months. Over the last half-year time period, Enstar Group Ltd. (NASDAQ:ESGR) has seen 1 unique insiders purchasing, and 1 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 Enstar Group Ltd. (NASDAQ:ESGR). These stocks are Kemper Corporation (NYSE:KMPR), The Hanover Insurance Group, Inc. (NYSE:THG), MBIA Inc. (NYSE:MBI), Mercury General Corporation (NYSE:MCY), and Endurance Specialty Holdings Ltd. (NYSE:ENH). This group of stocks are in the property & casualty insurance industry and their market caps are similar to ESGR’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Kemper Corporation (NYSE:KMPR) | 5 | 0 | 2 |
| The Hanover Insurance Group, Inc. (NYSE:THG) | 6 | 0 | 1 |
| MBIA Inc. (NYSE:MBI) | 25 | 0 | 0 |
| Mercury General Corporation (NYSE:MCY) | 6 | 0 | 1 |
| Endurance Specialty Holdings Ltd. (NYSE:ENH) | 10 | 0 | 6 |
With the results demonstrated by Insider Monkey’s studies, retail investors should always keep an eye on hedge fund and insider trading sentiment, and Enstar Group Ltd. (NASDAQ:ESGR) is no exception.
