Cna Financial Corp (NYSE:CNA) was in 14 hedge funds’ portfolio at the end of December. CNA investors should be aware of an increase in enthusiasm from smart money of late. There were 13 hedge funds in our database with CNA holdings at the end of the previous quarter.
If you’d ask most investors, hedge funds are perceived as worthless, outdated investment tools of yesteryear. While there are greater than 8000 funds with their doors open at present, we hone in on the crème de la crème of this group, close to 450 funds. It is widely believed that this group oversees the lion’s share of all hedge funds’ total asset base, and by tracking their highest performing equity investments, we have formulated a number of investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year 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 outclassed the S&P 500 index by 24 percentage points in 7 months (see all of our picks from August).
Just as important, positive insider trading activity is another way to break down the stock market universe. Just as you’d expect, there are a variety of incentives for an upper level exec to get rid of shares of his or her company, but only one, very simple reason why they would initiate a purchase. Many academic studies have demonstrated the useful potential of this method if piggybackers know where to look (learn more here).
With these “truths” under our belt, let’s take a glance at the recent action regarding Cna Financial Corp (NYSE:CNA).
How have hedgies been trading Cna Financial Corp (NYSE:CNA)?
In preparation for this year, a total of 14 of the hedge funds we track were long in this stock, a change of 8% from the third quarter. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings meaningfully.
According to our comprehensive database, Pine River Capital Management, managed by Brian Taylor, holds the largest position in Cna Financial Corp (NYSE:CNA). Pine River Capital Management has a $19 million position in the stock, comprising 0.4% of its 13F portfolio. On Pine River Capital Management’s heels is Pacifica Capital Investments, managed by Steve Leonard, which held a $11.7 million position; the fund has 8.7% of its 13F portfolio invested in the stock. Some other hedgies that hold long positions include Ken Griffin’s Citadel Investment Group, Wallace Weitz’s Wallace R. Weitz & Co. and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
As aggregate interest increased, key money managers were leading the bulls’ herd. Raiff Partners, managed by Robert Raiff, initiated the biggest position in Cna Financial Corp (NYSE:CNA). Raiff Partners had 0.3 million invested in the company at the end of the quarter.
Insider trading activity in Cna Financial Corp (NYSE:CNA)
Insider buying is at its handiest when the primary stock in question has experienced transactions within the past six months. Over the latest 180-day time frame, Cna Financial Corp (NYSE:CNA) has seen zero unique insiders buying, and 2 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 Cna Financial Corp (NYSE:CNA). These stocks are Hartford Financial Services Group Inc (NYSE:HIG), Arch Capital Group Ltd. (NASDAQ:ACGL), Cincinnati Financial Corporation (NASDAQ:CINF), Everest Re Group Ltd (NYSE:RE), and XL Group plc (NYSE:XL). This group of stocks belong to the property & casualty insurance industry and their market caps are similar to CNA’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Hartford Financial Services Group Inc (NYSE:HIG) | 46 | 1 | 0 |
| Arch Capital Group Ltd. (NASDAQ:ACGL) | 10 | 0 | 6 |
| Cincinnati Financial Corporation (NASDAQ:CINF) | 15 | 1 | 0 |
| Everest Re Group Ltd (NYSE:RE) | 18 | 0 | 2 |
| XL Group plc (NYSE:XL) | 23 | 0 | 2 |
With the returns demonstrated by the aforementioned tactics, retail investors must always keep an eye on hedge fund and insider trading activity, and Cna Financial Corp (NYSE:CNA) shareholders fit into this picture quite nicely.
