Here is What Hedge Funds Think About Employers Holdings, Inc. (EIG)

The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Employers Holdings, Inc. (NYSE:EIG).

Is Employers Holdings, Inc. (NYSE:EIG) an excellent stock to buy now? Hedge funds are indeed in a bearish mood. The number of bullish hedge fund positions that are disclosed in regulatory 13F filings retreated by 2 in recent months. EIG was in 10 hedge funds’ portfolios at the end of the third quarter of 2016. There were 12 hedge funds in our database with EIG holdings at the end of the previous quarter. At the end of this article we will also compare EIG to other stocks including Meritor Inc (NYSE:MTOR), Monmouth R.E. Inv. Corp. (NYSE:MNR), and Genomic Health, Inc. (NASDAQ:GHDX) to get a better sense of its popularity.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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Hedge fund activity in Employers Holdings, Inc. (NYSE:EIG)

At Q3’s end, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, down by 17% from the second quarter of 2016. The graph below displays the number of hedge funds with bullish position in EIG over the last 5 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, Cliff Asness’ AQR Capital Management has the number one position in Employers Holdings, Inc. (NYSE:EIG), worth close to $9.4 million. On AQR Capital Management’s heels is Renaissance Technologies, one of the largest hedge funds in the world, holding a $7.2 million position. Some other peers that are bullish include D. E. Shaw’s D E Shaw, Chuck Royce’s Royce & Associates and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Due to the fact that Employers Holdings, Inc. (NYSE:EIG) has gone through a decline in interest from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of hedgies that slashed their positions entirely heading into Q4. It’s worth mentioning that Robert B. Gillam’s McKinley Capital Management cashed in the largest position of the “upper crust” of funds studied by Insider Monkey, totaling an estimated $3.4 million in stock. Glenn Russell Dubin’s fund, Highbridge Capital Management, also dropped its stock, about $0.5 million worth.

Let’s now take a look at hedge fund activity in other stocks similar to Employers Holdings, Inc. (NYSE:EIG). These stocks are Meritor Inc (NYSE:MTOR), Monmouth R.E. Inv. Corp. (NYSE:MNR), Genomic Health, Inc. (NASDAQ:GHDX), and Rush Enterprises, Inc. (NASDAQ:RUSHB). This group of stocks’ market valuations match EIG’s market valuation.

As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $214 million. That figure was $39 million in EIG’s case. Meritor Inc (NYSE:MTOR) is the most popular stock in this table. On the other hand Rush Enterprises, Inc. (NASDAQ:RUSHB) is the least popular one with only 4 bullish hedge fund positions. Employers Holdings, Inc. (NYSE:EIG) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard MTOR might be a better candidate to consider taking a long position in.

Disclosure: None