James River Group Holdings Ltd (JRVR): Are Hedge Funds Right About This Stock?

Before putting in our own effort and resources into finding a good investment, we can quickly utilize hedge fund expertise to give us a quick glimpse of whether that stock could make for a good addition to our portfolios. The odds are not exactly stacked in investors’ favor when it comes to beating the market, as evidenced by the fact that less than 49% of the stocks in the S&P 500 did so during the 12-month period ending October 30. However, 63% of hedge funds’ top 30 stock picks from the index did beat the market, and returned nearly twice as much on average as the index. Thus, we can see that the tireless research and efforts of hedge funds to identify winning stocks can work to our advantage when we know how to use the data. While not all of their picks will be winners, our odds are much better following their best stock picks than trying to go it alone.

Is James River Group Holdings Ltd (NASDAQ:JRVR) an outstanding investment today? The best stock pickers are taking a bullish view. The number of long hedge fund positions improved by 4 lately. At the end of this article we will also compare JRVR to other stocks including Kforce Inc. (NASDAQ:KFRC), Square 1 Financial Inc (NASDAQ:SQBK), and Coherus Biosciences Inc (NASDAQ:CHRS) to get a better sense of its popularity.

Now, let’s take a glance at the recent action surrounding James River Group Holdings Ltd (NASDAQ:JRVR).

How are hedge funds trading James River Group Holdings Ltd (NASDAQ:JRVR)?

Heading into Q4, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 44% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).

Of the funds tracked by Insider Monkey, D. E. Shaw’s D E Shaw has the largest position in James River Group Holdings Ltd (NASDAQ:JRVR), worth close to $377.7 million, comprising 0.6% of its total 13F portfolio. Coming in second is Ken Griffin of Citadel Investment Group, with an $20.3 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining peers with similar optimism encompass Israel Englander’s Millennium Management, Anand Parekh’s Alyeska Investment Group and Porter Collins, Daniel Moses, and Vincent Daniel’s Seawolf Capital.

Now, some big names were breaking ground themselves. ZWEIG DIMENNA PARTNERS, managed by Joe DiMenna, initiated the biggest position in James River Group Holdings Ltd (NASDAQ:JRVR). ZWEIG DIMENNA PARTNERS had $4.7 million invested in the company at the end of the quarter. Millennium Management Subsidiary’s Blue Arrow Capital Management also initiated an $1.3 million position during the quarter. The following funds were also among the new JRVR investors: Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Chao Ku’s Nine Chapters Capital Management, and Jim Simons’s Renaissance Technologies.

On the next page, we take a look at hedge fund activity in other stocks – not necessarily in the same industry as James River Group Holdings Ltd (NASDAQ:JRVR) but similarly valued.

We will take a look at Kforce Inc. (NASDAQ:KFRC), Square 1 Financial Inc (NASDAQ:SQBK), Coherus Biosciences Inc (NASDAQ:CHRS), and Rexford Industrial Realty Inc (NYSE:REXR). This group of stocks’ market valuations are closest to JRVR’s market valuation.

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $97 million. That figure was $449 million in JRVR’s case. Kforce Inc. (NASDAQ:KFRC) is the most popular stock in this table. On the other hand Rexford Industrial Realty Inc (NYSE:REXR) is the least popular one with only 7 bullish hedge fund positions. James River Group Holdings Ltd (NASDAQ:JRVR) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal but given the large hedge fund position increases, JRVR is worth a closer look.