Should I Buy Assurant, Inc. (AIZ)?

Is Assurant, Inc. (NYSE:AIZ) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.

Assurant, Inc. (NYSE:AIZ) investors should pay attention to an increase in activity from the world’s largest hedge funds recently. Assurant, Inc. (NYSE:AIZ) was in 28 hedge funds’ portfolios at the end of September. The all time high for this statistic is 39. Our calculations also showed that AIZ isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind let’s go over the new hedge fund action regarding Assurant, Inc. (NYSE:AIZ).

Andreas Halvorsen of Viking Global

Do Hedge Funds Think AIZ Is A Good Stock To Buy Now?

At Q3’s end, a total of 28 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 8% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in AIZ over the last 25 quarters. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their stakes considerably (or already accumulated large positions).

The largest stake in Assurant, Inc. (NYSE:AIZ) was held by Viking Global, which reported holding $286.8 million worth of stock at the end of September. It was followed by Lyrical Asset Management with a $170.4 million position. Other investors bullish on the company included Samlyn Capital, AQR Capital Management, and Adage Capital Management. In terms of the portfolio weights assigned to each position One Fin Capital Management allocated the biggest weight to Assurant, Inc. (NYSE:AIZ), around 9.42% of its 13F portfolio. Strycker View Capital is also relatively very bullish on the stock, dishing out 6.17 percent of its 13F equity portfolio to AIZ.

Now, key money managers were leading the bulls’ herd. Strycker View Capital, managed by Usman Waheed, initiated the most outsized position in Assurant, Inc. (NYSE:AIZ). Strycker View Capital had $9.6 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also initiated a $6.5 million position during the quarter. The following funds were also among the new AIZ investors: Christopher Hillary’s Roubaix Capital, Jinghua Yan’s TwinBeech Capital, and Greg Eisner’s Engineers Gate Manager.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Assurant, Inc. (NYSE:AIZ) but similarly valued. We will take a look at Churchill Downs Incorporated (NASDAQ:CHDN), AGCO Corporation (NYSE:AGCO), Federal Realty Investment Trust (NYSE:FRT), Credit Acceptance Corp. (NASDAQ:CACC), Jefferies Financial Group Inc. (NYSE:JEF), Alcoa Corporation (NYSE:AA), and Mirati Therapeutics, Inc. (NASDAQ:MRTX). This group of stocks’ market caps resemble AIZ’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 32.3 hedge funds with bullish positions and the average amount invested in these stocks was $1028 million. That figure was $794 million in AIZ’s case. Mirati Therapeutics, Inc. (NASDAQ:MRTX) is the most popular stock in this table. On the other hand Federal Realty Investment Trust (NYSE:FRT) is the least popular one with only 21 bullish hedge fund positions. Assurant, Inc. (NYSE:AIZ) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AIZ is 42.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 31.1% in 2021 through December 9th and surpassed the market again by 5.1 percentage points. Unfortunately AIZ wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); AIZ investors were disappointed as the stock returned -0.9% since the end of September (through 12/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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Disclosure: None. This article was originally published at Insider Monkey.