In today’s marketplace, there are many gauges market participants can use to track stocks. A couple of the best are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite fund managers can beat the market by a significant amount (see just how much).
Equally as beneficial, bullish insider trading sentiment is another way to break down the marketplace. Obviously, there are many incentives for a bullish insider to sell shares of his or her company, but only one, very simple reason why they would buy. Several academic studies have demonstrated the useful potential of this strategy if investors know what to do (learn more here).
Keeping this in mind, it’s important to take a look at the key action surrounding Arch Capital Group Ltd. (NASDAQ:ACGL).
How have hedgies been trading Arch Capital Group Ltd. (NASDAQ:ACGL)?
In preparation for this quarter, a total of 12 of the hedge funds we track were bullish in this stock, a change of -8% from the first quarter. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their holdings meaningfully.
According to our comprehensive database, FPR Partners, managed by Bob Peck and Andy Raab, holds the most valuable position in Arch Capital Group Ltd. (NASDAQ:ACGL). FPR Partners has a $291.2 million position in the stock, comprising 13.6% of its 13F portfolio. The second largest stake is held by Brian Ashford-Russell and Tim Woolley of Polar Capital, with a $49.6 million position; the fund has 2% of its 13F portfolio invested in the stock. Other peers with similar optimism include Martin Whitman’s Third Avenue Management, Robert Pitts’s Steadfast Capital Management and Bob Peck and Andy Raab’s FPR Partners.
Since Arch Capital Group Ltd. (NASDAQ:ACGL) has experienced declining sentiment from hedge fund managers, it’s safe to say that there lies a certain “tier” of hedge funds who were dropping their full holdings last quarter. It’s worth mentioning that Daniel Lascano’s Lomas Capital Management said goodbye to the largest investment of all the hedgies we key on, valued at close to $2.9 million in stock.. Matthew Tewksbury’s fund, Stevens Capital Management, also said goodbye to its stock, about $0.7 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 1 funds last quarter.
How have insiders been trading Arch Capital Group Ltd. (NASDAQ:ACGL)?
Insider trading activity, especially when it’s bullish, is at its handiest when the company we’re looking at has experienced transactions within the past six months. Over the latest half-year time frame, Arch Capital Group Ltd. (NASDAQ:ACGL) has seen zero unique insiders buying, and 6 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 Arch Capital Group Ltd. (NASDAQ:ACGL). These stocks are Cna Financial Corp (NYSE:CNA), W.R. Berkley Corporation (NYSE:WRB), Everest Re Group Ltd (NYSE:RE), Cincinnati Financial Corporation (NASDAQ:CINF), and Alleghany Corporation (NYSE:Y). This group of stocks belong to the property & casualty insurance industry and their market caps match ACGL’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Cna Financial Corp (NYSE:CNA) | 12 | 0 | 2 |
| W.R. Berkley Corporation (NYSE:WRB) | 17 | 1 | 2 |
| Everest Re Group Ltd (NYSE:RE) | 17 | 0 | 3 |
| Cincinnati Financial Corporation (NASDAQ:CINF) | 9 | 1 | 0 |
| Alleghany Corporation (NYSE:Y) | 23 | 1 | 2 |
With the returns exhibited by Insider Monkey’s studies, retail investors should always keep an eye on hedge fund and insider trading sentiment, and Arch Capital Group Ltd. (NASDAQ:ACGL) is an important part of this process.
