PICO Holdings Inc (NASDAQ:PICO) was in 8 hedge funds’ portfolio at the end of the fourth quarter of 2012. PICO investors should pay attention to an increase in support from the world’s most elite money managers in recent months. There were 5 hedge funds in our database with PICO holdings at the end of the previous quarter.
To most stock holders, hedge funds are assumed to be underperforming, old financial vehicles of yesteryear. While there are over 8000 funds trading today, we at Insider Monkey hone in on the top tier of this club, about 450 funds. It is widely believed that this group oversees most of the hedge fund industry’s total asset base, and by tracking their best picks, we have identified a few investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a 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 24 percentage points in 7 months (see all of our picks from August).
Just as key, optimistic insider trading sentiment is another way to parse down the world of equities. Just as you’d expect, there are lots of reasons for an upper level exec to cut shares of his or her company, but only one, very clear reason why they would initiate a purchase. Several academic studies have demonstrated the market-beating potential of this strategy if “monkeys” understand what to do (learn more here).
Keeping this in mind, let’s take a gander at the latest action surrounding PICO Holdings Inc (NASDAQ:PICO).
What does the smart money think about PICO Holdings Inc (NASDAQ:PICO)?
In preparation for this year, a total of 8 of the hedge funds we track were long in this stock, a change of 60% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their stakes significantly.
According to our comprehensive database, Royce & Associates, managed by Chuck Royce, holds the biggest position in PICO Holdings Inc (NASDAQ:PICO). Royce & Associates has a $54.2 million position in the stock, comprising 0.2% of its 13F portfolio. On Royce & Associates’s heels is Renaissance Technologies, managed by Jim Simons, which held a $1.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining peers that are bullish include Ken Griffin’s Citadel Investment Group, D. E. Shaw’s D E Shaw and David Cohen and Harold Levy’s Iridian Asset Management.
As aggregate interest increased, key hedge funds were leading the bulls’ herd. Iridian Asset Management, managed by David Cohen and Harold Levy, assembled the most valuable position in PICO Holdings Inc (NASDAQ:PICO). Iridian Asset Management had 0.4 million invested in the company at the end of the quarter. Mike Vranos’s Ellington also initiated a $0.2 million position during the quarter. The only other fund with a brand new PICO position is Glenn Russell Dubin’s Highbridge Capital Management.
How have insiders been trading PICO Holdings Inc (NASDAQ:PICO)?
Insider buying is particularly usable when the primary stock in question has experienced transactions within the past 180 days. Over the latest six-month time period, PICO Holdings Inc (NASDAQ:PICO) has seen zero unique insiders buying, and zero 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 PICO Holdings Inc (NASDAQ:PICO). These stocks are Assurant, Inc. (NYSE:AIZ), CNO Financial Group Inc (NYSE:CNO), StanCorp Financial Group, Inc. (NYSE:SFG), Eastern Insurance Holdings Inc (NASDAQ:EIHI), and Triple-S Management Corp.(NYSE:GTS). This group of stocks belong to the accident & health insurance industry and their market caps are closest to PICO’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Assurant, Inc. (NYSE:AIZ) | 17 | 0 | 1 |
| CNO Financial Group Inc (NYSE:CNO) | 17 | 0 | 9 |
| StanCorp Financial Group, Inc. (NYSE:SFG) | 7 | 0 | 6 |
| Eastern Insurance Holdings Inc (NASDAQ:EIHI) | 2 | 1 | 1 |
| Triple-S Management Corp.(NYSE:GTS) | 7 | 0 | 0 |
With the results shown by the aforementioned tactics, everyday investors must always monitor hedge fund and insider trading activity, and PICO Holdings Inc (NASDAQ:PICO) shareholders fit into this picture quite nicely.
