Hedge Funds Are Souring On Everest Re Group Ltd (RE)

The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Everest Re Group Ltd (NYSE:RE).

Everest Re Group Ltd (NYSE:RE) was in 26 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 36. RE has seen a decrease in support from the world’s most elite money managers in recent months. There were 30 hedge funds in our database with RE holdings at the end of June. Our calculations also showed that RE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind we’re going to take a gander at the recent hedge fund action encompassing Everest Re Group Ltd (NYSE:RE).

Noam Gottesman of GLG Partners

Do Hedge Funds Think RE Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2021, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -13% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in RE over the last 25 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, AQR Capital Management held the most valuable stake in Everest Re Group Ltd (NYSE:RE), which was worth $181 million at the end of the third quarter. On the second spot was GLG Partners which amassed $69.7 million worth of shares. Polar Capital, Adage Capital Management, and Renaissance Technologies were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Prana Capital Management allocated the biggest weight to Everest Re Group Ltd (NYSE:RE), around 2.39% of its 13F portfolio. Te Ahumairangi Investment Management is also relatively very bullish on the stock, earmarking 1.57 percent of its 13F equity portfolio to RE.

Seeing as Everest Re Group Ltd (NYSE:RE) has witnessed declining sentiment from the aggregate hedge fund industry, logic holds that there lies a certain “tier” of hedgies that slashed their full holdings last quarter. It’s worth mentioning that Mason Hawkins’s Southeastern Asset Management cut the largest stake of all the hedgies monitored by Insider Monkey, comprising an estimated $125.7 million in stock, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital was right behind this move, as the fund said goodbye to about $8.3 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 4 funds last quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Everest Re Group Ltd (NYSE:RE) but similarly valued. We will take a look at NRG Energy Inc (NYSE:NRG), Bausch Health Companies Inc. (NYSE:BHC), TD SYNNEX Corporation (NYSE:SNX), Deckers Outdoor Corp (NYSE:DECK), Five Below Inc (NASDAQ:FIVE), Cleveland-Cliffs Inc (NYSE:CLF), and Norwegian Cruise Line Holdings Ltd (NYSE:NCLH). All of these stocks’ market caps match RE’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 36.6 hedge funds with bullish positions and the average amount invested in these stocks was $1403 million. That figure was $498 million in RE’s case. Deckers Outdoor Corp (NYSE:DECK) is the most popular stock in this table. On the other hand TD SYNNEX Corporation (NYSE:SNX) is the least popular one with only 24 bullish hedge fund positions. Everest Re Group Ltd (NYSE:RE) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for RE is 26.8. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. A small number of hedge funds were also right about betting on RE as the stock returned 8.8% since the end of the third quarter (through 12/9) and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.