Now, according to many investors, hedge funds are viewed as overrated, old financial tools of an era lost to time. Although there are In excess of 8,000 hedge funds with their doors open currently, this site looks at the masters of this club, about 525 funds. It is widely held that this group oversees most of the smart money’s total assets, and by monitoring their highest quality investments, we’ve unsheathed a number of investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum 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 outperformed the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Equally as necessary, positive insider trading sentiment is another way to look at the marketplace. There are plenty of reasons for an insider to downsize shares of his or her company, but just one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the valuable potential of this strategy if piggybackers understand where to look (learn more here).
Now that that’s out of the way, we’re going to examine the latest info surrounding Tower Group International Ltd (NASDAQ:TWGP).
What does the smart money think about Tower Group International Ltd (NASDAQ:TWGP)?
In preparation for the third quarter, a total of 12 of the hedge funds we track held long positions in this stock, a change of -40% from the previous quarter. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were upping their holdings substantially.
According to our 13F database, Empyrean Capital Partners, managed by Michael A. Price and Amos Meron, holds the largest position in Tower Group International Ltd (NASDAQ:TWGP). Empyrean Capital Partners has a $49.2 million position in the stock, comprising 1.1% of its 13F portfolio. Coming in second is Christian Leone of Luxor Capital Group, with a $40.9 million position; the fund has 1.1% of its 13F portfolio invested in the stock. Other hedge funds that are bullish include Ken Gray and Steve Walsh’s Bryn Mawr Capital, Youlia Miteva’s Proxima Capital Management and Chuck Royce’s Royce & Associates.
Because Tower Group International Ltd (NASDAQ:TWGP) has faced a fall in interest from upper-tier hedge fund managers, we can see that there was a specific group of money managers who were dropping their entire stakes heading into Q2. Interestingly, Matthew Hulsizer’s PEAK6 Capital Management cut the biggest stake of all the hedgies we key on, valued at about $9.7 million in stock, and Peter S. Park of Park West Asset Management was right behind this move, as the fund dropped about $4.6 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 8 funds heading into Q2.
How are insiders trading Tower Group International Ltd (NASDAQ:TWGP)?
Legal insider trading, particularly when it’s bullish, is best served when the company we’re looking at has experienced transactions within the past six months. Over the last 180-day time period, Tower Group International Ltd (NASDAQ:TWGP) has seen zero unique insiders buying, 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 Tower Group International Ltd (NASDAQ:TWGP). These stocks are Greenlight Capital Re, Ltd. (NASDAQ:GLRE), FBL Financial Group (NYSE:FFG), MGIC Investment Corp. (NYSE:MTG), Argo Group International Holdings, Ltd. (NASDAQ:AGII), and Hilltop Holdings Inc. (NYSE:HTH). All of these stocks are in the property & casualty insurance industry and their market caps are similar to TWGP’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Greenlight Capital Re, Ltd. (NASDAQ:GLRE) | 12 | 0 | 0 |
| FBL Financial Group (NYSE:FFG) | 6 | 0 | 0 |
| MGIC Investment Corp. (NYSE:MTG) | 37 | 0 | 0 |
| Argo Group International Holdings, Ltd. (NASDAQ:AGII) | 12 | 0 | 0 |
| Hilltop Holdings Inc. (NYSE:HTH) | 14 | 0 | 0 |
Using the results explained by the previously mentioned research, regular investors must always keep one eye on hedge fund and insider trading activity, and Tower Group International Ltd (NASDAQ:TWGP) is an important part of this process.
