If you’d ask most shareholders, hedge funds are viewed as unimportant, old investment vehicles of the past. While there are greater than 8000 funds in operation at present, we at Insider Monkey choose to focus on the leaders of this group, around 450 funds. It is estimated that this group oversees the majority of the hedge fund industry’s total asset base, and by paying attention to their best equity investments, we have spotted a number of investment strategies that have historically outpaced the market. 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 23.3 percentage points in 8 months (see the details here).
Just as beneficial, optimistic insider trading activity is a second way to parse down the financial markets. Obviously, there are many motivations for an insider to sell shares of his or her company, but just one, very simple reason why they would behave bullishly. Several empirical studies have demonstrated the useful potential of this strategy if “monkeys” know where to look (learn more here).
Consequently, it’s important to take a peek at the latest action encompassing Principal Financial Group Inc (NYSE:PFG).
What does the smart money think about Principal Financial Group Inc (NYSE:PFG)?
At the end of the first quarter, a total of 7 of the hedge funds we track were bullish in this stock, a change of -42% from one quarter earlier. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their holdings substantially.
According to our comprehensive database, James H. Litinsky’s JHL Capital Group had the biggest position in Principal Financial Group Inc (NYSE:PFG), worth close to $35.3 million, comprising 2.6% of its total 13F portfolio. Sitting at the No. 2 spot is AQR Capital Management, managed by Cliff Asness, which held a $3.4 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other peers with similar optimism include David Harding’s Winton Capital Management, John Overdeck and David Siegel’s Two Sigma Advisors and Ken Griffin’s Citadel Investment Group.
Due to the fact that Principal Financial Group Inc (NYSE:PFG) has witnessed a declination in interest from hedge fund managers, we can see that there was a specific group of money managers that decided to sell off their positions entirely heading into Q2. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dropped the largest stake of all the hedgies we watch, worth about $11.8 million in stock.. Israel Englander’s fund, Millennium Management, also dropped its stock, about $0.7 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 5 funds heading into Q2.
What do corporate executives and insiders think about Principal Financial Group Inc (NYSE:PFG)?
Insider purchases made by high-level executives is particularly usable when the primary stock in question has experienced transactions within the past half-year. Over the last half-year time frame, Principal Financial Group Inc (NYSE:PFG) has experienced 1 unique insiders buying, and 14 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Principal Financial Group Inc (NYSE:PFG). These stocks are Northern Trust Corporation (NASDAQ:NTRS), Invesco Ltd. (NYSE:IVZ), Affiliated Managers Group, Inc. (NYSE:AMG), Carlyle Group LP (NASDAQ:CG), and Oaktree Capital Group LLC (NYSE:OAK). This group of stocks are in the asset management industry and their market caps are closest to PFG’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Northern Trust Corporation (NASDAQ:NTRS) | 23 | 0 | 10 |
| Invesco Ltd. (NYSE:IVZ) | 28 | 0 | 7 |
| Affiliated Managers Group, Inc. (NYSE:AMG) | 15 | 0 | 7 |
| Carlyle Group LP (NASDAQ:CG) | 7 | 0 | 0 |
| Oaktree Capital Group LLC (NYSE:OAK) | 15 | 0 | 0 |
With the results exhibited by Insider Monkey’s tactics, everyday investors should always keep an eye on hedge fund and insider trading sentiment, and Principal Financial Group Inc (NYSE:PFG) is no exception.
