Reinsurance Group of America Inc (NYSE:RGA): Hedge Funds Are Bullish and Insiders Are Bearish, What Should You Do?

Reinsurance Group of America Inc (NYSE:RGA) investors should be aware of an increase in hedge fund interest in recent months.

To most investors, hedge funds are assumed to be worthless, old financial vehicles of years past. While there are over 8000 funds with their doors open today, we hone in on the upper echelon of this club, close to 450 funds. It is widely believed that this group has its hands on the lion’s share of the hedge fund industry’s total asset base, and by paying attention to their best equity investments, we have determined a few investment strategies that have historically outperformed Mr. Market. 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 outperformed the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).

Just as integral, optimistic insider trading sentiment is another way to parse down the world of equities. As the old adage goes: there are plenty of incentives for an insider to sell shares of his or her company, but only one, very obvious reason why they would behave bullishly. Plenty of empirical studies have demonstrated the useful potential of this tactic if piggybackers know what to do (learn more here).

Keeping this in mind, let’s take a peek at the key action surrounding Reinsurance Group of America Inc (NYSE:RGA).

What have hedge funds been doing with Reinsurance Group of America Inc (NYSE:RGA)?

At the end of the fourth quarter, a total of 16 of the hedge funds we track were long in this stock, a change of 33% from the third quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their holdings significantly.

When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the largest position in Reinsurance Group of America Inc (NYSE:RGA). Royce & Associates has a $117 million position in the stock, comprising 0.4% of its 13F portfolio. On Royce & Associates’s heels is Citadel Investment Group, managed by Ken Griffin, which held a $112 million position; 0% of its 13F portfolio is allocated to the stock. Some other peers that hold long positions include Martin D. Sass’s MD Sass, Cliff Asness’s AQR Capital Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Consequently, key money managers have been driving this bullishness. Adage Capital Management, managed by Phill Gross and Robert Atchinson, assembled the most outsized position in Reinsurance Group of America Inc (NYSE:RGA). Adage Capital Management had 10 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $8 million investment in the stock during the quarter. The other funds with brand new RGA positions are Eric D. Hovde’s Hovde Capital, Steven Cohen’s SAC Capital Advisors, and Mike Vranos’s Ellington.

How are insiders trading Reinsurance Group of America Inc (NYSE:RGA)?

Insider buying is best served when the company in focus has seen transactions within the past six months. Over the last six-month time frame, Reinsurance Group of America Inc (NYSE:RGA) has experienced zero unique insiders buying, and 4 insider sales (see the details of insider trades here).

With the returns shown by Insider Monkey’s research, retail investors must always keep an eye on hedge fund and insider trading sentiment, and Reinsurance Group of America Inc (NYSE:RGA) shareholders fit into this picture quite nicely.

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