Hedge Funds Are Selling Assurant, Inc. (AIZ)

Is Assurant, Inc. (NYSE:AIZ) a good investment?

If you were to ask many of your peers, hedge funds are perceived as bloated, old investment vehicles of a period lost to current times. Although there are In excess of 8,000 hedge funds in operation currently, this site aim at the crème de la crème of this group, around 525 funds. It is assumed that this group has its hands on most of the smart money’s total capital, and by monitoring their highest performing stock picks, we’ve discovered a number of investment strategies that have historically outpaced Mr. Market. 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 started sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).

Equally as useful, optimistic insider trading sentiment is another way to analyze the marketplace. As the old adage goes: there are many reasons for an executive to cut shares of his or her company, but just one, very obvious reason why they would behave bullishly. Many empirical studies have demonstrated the impressive potential of this tactic if “monkeys” know where to look (learn more here).

Now that that’s out of the way, we’re going to examine the recent info for Assurant, Inc. (NYSE:AIZ).

Hedge fund activity in Assurant, Inc. (NYSE:AIZ)

At Q2’s end, a total of 15 of the hedge funds we track were bullish in this stock, a change of -6% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their holdings meaningfully.

Out of the hedge funds we follow, Cliff Asness’s AQR Capital Management had the largest position in Assurant, Inc. (NYSE:AIZ), worth close to $87.5 million, comprising 0.3% of its total 13F portfolio. Sitting at the No. 2 spot is Abrams Capital Management, managed by David Abrams, which held a $76.4 million position; the fund has 4.4% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Richard S. Pzena’s Pzena Investment Management, Ric Dillon’s Diamond Hill Capital and Ken Griffin’s Citadel Investment Group.

As Assurant, Inc. (NYSE:AIZ) has faced a fall in interest from the top-tier hedge fund industry, it’s easy to see that there were a few funds that decided to sell off their positions entirely last quarter. Interestingly, Peter Adam Hochfelder’s Brahman Capital cut the biggest investment of all the hedgies we key on, worth about $58.4 million in stock, and Paul Tudor Jones of Tudor Investment Corp was right behind this move, as the fund dumped about $0.5 million worth. These moves are important to note, as total hedge fund interest dropped by 1 funds last quarter.

How have insiders been trading Assurant, Inc. (NYSE:AIZ)?

Legal insider trading, particularly when it’s bullish, is best served when the company in focus has experienced transactions within the past half-year. Over the latest 180-day time period, Assurant, Inc. (NYSE:AIZ) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll check out the relationship between both of these indicators in other stocks similar to Assurant, Inc. (NYSE:AIZ). These stocks are PICO Holdings Inc (NASDAQ:PICO), AFLAC Incorporated (NYSE:AFL), Unum Group (NYSE:UNM), StanCorp Financial Group, Inc. (NYSE:SFG), and CNO Financial Group Inc (NYSE:CNO). This group of stocks are the members of the accident & health insurance industry and their market caps are similar to AIZ’s market cap.

Using the results demonstrated by our studies, regular investors must always keep one eye on hedge fund and insider trading activity, and Assurant, Inc. (NYSE:AIZ) shareholders fit into this picture quite nicely.

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