Is Reinsurance Group of America Inc (NYSE:RGA) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is Reinsurance Group of America Inc (NYSE:RGA) undervalued? Investors who are in the know are getting more optimistic. The number of bullish hedge fund bets that are revealed through the 13F filings advanced by 2 recently. RGAwas in 19 hedge funds’ portfolios at the end of the third quarter of 2016. There were 17 hedge funds in our database with RGA positions at the end of the previous quarter. At the end of this article we will also compare RGA to other stocks including Mercadolibre Inc (NASDAQ:MELI), Liberty Broadband Corp (NASDAQ:LBRDK), and FMC Corp (NYSE:FMC) to get a better sense of its popularity.
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How are hedge funds trading Reinsurance Group of America Inc (NYSE:RGA)?
Heading into the fourth quarter of 2016, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 12% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards RGA over the last 5 quarters. So, let’s examine 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 Reinsurance Group of America Inc (NYSE:RGA), worth close to $102.2 million. Sitting at the No. 2 spot is Diamond Hill Capital, led by Ric Dillon, which holds a $54.6 million position. Some other hedge funds and institutional investors that are bullish consist of Chuck Royce’s Royce & Associates, Ken Griffin’s Citadel Investment Group and Brian Ashford-Russell and Tim Woolley’s Polar 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.
As aggregate interest increased, key hedge funds have been driving this bullishness. Interval Partners, led by Gregg Moskowitz, initiated the biggest position in Reinsurance Group of America Inc (NYSE:RGA). Interval Partners had $2.5 million invested in the company at the end of the quarter. Matthew Tewksbury’s Stevens Capital Management also made a $1.1 million investment in the stock during the quarter. The following funds were also among the new RGA investors: Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, Ken Griffin’s Citadel Investment Group, and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s also examine hedge fund activity in other stocks similar to Reinsurance Group of America Inc (NYSE:RGA). These stocks are Mercadolibre Inc (NASDAQ:MELI), Liberty Broadband Corp (NASDAQ:LBRDK), FMC Corp (NYSE:FMC), and Liberty Broadband Corp (NASDAQ:LBRDA). This group of stocks’ market caps resemble RGA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MELI | 29 | 592569 | 8 |
| LBRDK | 42 | 3745967 | -1 |
| FMC | 28 | 1015438 | -9 |
| LBRDA | 27 | 399996 | 1 |
As you can see these stocks had an average of 32 hedge funds with bullish positions and the average amount invested in these stocks was $1.44 billion. That figure was $287 million in RGA’s case. Liberty Broadband Corp (NASDAQ:LBRDK) is the most popular stock in this table. On the other hand Liberty Broadband Corp (NASDAQ:LBRDA) is the least popular one with only 27 bullish hedge fund positions. Compared to these stocks Reinsurance Group of America Inc (NYSE:RGA) is even less popular than LBRDA. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
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