Is Selective Insurance Group (NASDAQ:SIGI) a bargain? Prominent investors are betting on the stock. The number of long hedge fund bets went up by 1 recently.
In the eyes of most traders, hedge funds are viewed as underperforming, old investment vehicles of the past. While there are greater than 8000 funds trading at the moment, we at Insider Monkey look at the leaders of this club, close to 450 funds. It is widely believed that this group controls most of all hedge funds’ total capital, and by monitoring their highest performing equity investments, 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 per annum 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 23.3 percentage points in 8 months (see the details here).
Just as integral, positive insider trading sentiment is a second way to break down the investments you’re interested in. As the old adage goes: there are plenty of reasons for an upper level exec to cut shares of his or her company, but just one, very simple reason why they would initiate a purchase. Various academic studies have demonstrated the impressive potential of this method if piggybackers know what to do (learn more here).
With all of this in mind, we’re going to take a gander at the latest action regarding Selective Insurance Group (NASDAQ:SIGI).
How have hedgies been trading Selective Insurance Group (NASDAQ:SIGI)?
Heading into Q2, a total of 6 of the hedge funds we track were long in this stock, a change of 20% from the first quarter. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were upping their holdings significantly.
As aggregate interest increased, some big names have jumped into Selective Insurance Group (NASDAQ:SIGI) headfirst. SAC Capital Advisors, managed by Steven Cohen, established the largest position in Selective Insurance Group (NASDAQ:SIGI). SAC Capital Advisors had 0.3 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also made a $0.2 million investment in the stock during the quarter.
How are insiders trading Selective Insurance Group (NASDAQ:SIGI)?
Insider purchases made by high-level executives is at its handiest when the primary stock in question has experienced transactions within the past six months. Over the last half-year time frame, Selective Insurance Group (NASDAQ:SIGI) has seen zero unique insiders purchasing, and 6 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Selective Insurance Group (NASDAQ:SIGI). These stocks are Argo Group International Holdings, Ltd. (NASDAQ:AGII), Tower Group International Ltd (NASDAQ:TWGP), Hilltop Holdings Inc. (NYSE:HTH), RLI Corp. (NYSE:RLI), and Montpelier Re Holdings Ltd. (NYSE:MRH). This group of stocks are in the property & casualty insurance industry and their market caps are similar to SIGI’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Argo Group International Holdings, Ltd. (NASDAQ:AGII) | 12 | 0 | 2 |
| Tower Group International Ltd (NASDAQ:TWGP) | 20 | 1 | 1 |
| Hilltop Holdings Inc. (NYSE:HTH) | 17 | 3 | 0 |
| RLI Corp. (NYSE:RLI) | 5 | 0 | 1 |
| Montpelier Re Holdings Ltd. (NYSE:MRH) | 13 | 3 | 4 |
With the results exhibited by Insider Monkey’s tactics, everyday investors should always watch hedge fund and insider trading activity, and Selective Insurance Group (NASDAQ:SIGI) shareholders fit into this picture quite nicely.
