Is Platinum Underwriters Holdings, Ltd. (NYSE:PTP) a marvelous investment today? Investors who are in the know are in a bullish mood. The number of long hedge fund positions advanced by 1 lately.
According to most stock holders, hedge funds are assumed to be underperforming, old financial vehicles of the past. While there are more than 8000 funds with their doors open today, we at Insider Monkey hone in on the crème de la crème of this club, around 450 funds. It is estimated that this group oversees the majority of the hedge fund industry’s total asset base, and by tracking their top picks, we have uncovered 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 started sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Just as key, bullish insider trading sentiment is another way to break down the investments you’re interested in. There are lots of motivations for an executive to get rid of shares of his or her company, but just one, very obvious reason why they would behave bullishly. Many empirical studies have demonstrated the valuable potential of this method if “monkeys” know what to do (learn more here).
Consequently, we’re going to take a peek at the key action encompassing Platinum Underwriters Holdings, Ltd. (NYSE:PTP).
How have hedgies been trading Platinum Underwriters Holdings, Ltd. (NYSE:PTP)?
Heading into 2013, a total of 14 of the hedge funds we track held long positions in this stock, a change of 8% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their stakes considerably.
Of the funds we track, David Dreman’s Dreman Value Management had the most valuable position in Platinum Underwriters Holdings, Ltd. (NYSE:PTP), worth close to $28 million, accounting for 0.8% of its total 13F portfolio. The second largest stake is held by Citadel Investment Group, managed by Ken Griffin, which held a $27 million position; the fund has 0% of its 13F portfolio invested in the stock. Other hedge funds with similar optimism include Chuck Royce’s Royce & Associates, John Thiessen’s Vertex One Asset Management and Raymond J. Harbert’s Harbert Management.
As one would reasonably expect, specific money managers have been driving this bullishness. CR Intrinsic Investors, managed by SAC Subsidiary, created the largest position in Platinum Underwriters Holdings, Ltd. (NYSE:PTP). CR Intrinsic Investors had 2 million invested in the company at the end of the quarter. Steven Cohen’s SAC Capital Advisors also initiated a $2 million position during the quarter. The only other fund with a brand new PTP position is Mike Vranos’s Ellington.
How have insiders been trading Platinum Underwriters Holdings, Ltd. (NYSE:PTP)?
Insider purchases made by high-level executives is particularly usable when the company we’re looking at has experienced transactions within the past six months. Over the latest half-year time period, Platinum Underwriters Holdings, Ltd. (NYSE:PTP) has seen 1 unique insiders purchasing, and 4 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Platinum Underwriters Holdings, Ltd. (NYSE:PTP). These stocks are Enstar Group Ltd. (NASDAQ:ESGR), Endurance Specialty Holdings Ltd. (NYSE:ENH), MBIA Inc. (NYSE:MBI), Kemper Corporation (NYSE:KMPR), and Radian Group Inc (NYSE:RDN). This group of stocks are in the property & casualty insurance industry and their market caps resemble PTP’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Enstar Group Ltd. (NASDAQ:ESGR) | 6 | 1 | 1 |
| Endurance Specialty Holdings Ltd. (NYSE:ENH) | 10 | 0 | 6 |
| MBIA Inc. (NYSE:MBI) | 25 | 0 | 0 |
| Kemper Corporation (NYSE:KMPR) | 5 | 0 | 2 |
| Radian Group Inc (NYSE:RDN) | 12 | 1 | 0 |
With the results demonstrated by our time-tested strategies, everyday investors must always pay attention to hedge fund and insider trading activity, and Platinum Underwriters Holdings, Ltd. (NYSE:PTP) is an important part of this process.
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