Should banking investors bet on MBIA Inc. (NYSE:MBI)?
In the 21st century investor’s toolkit, there are tons of metrics investors can use to track stocks. A pair of the best are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite hedge fund managers can outpace the broader indices by a significant margin (see just how much).
Equally as crucial, positive insider trading activity is another way to look at the stock market universe. There are a number of motivations for a corporate insider to cut shares of his or her company, but only one, very simple reason why they would buy. Various empirical studies have demonstrated the impressive potential of this method if shareholders know what to do (learn more here).
What’s more, it’s important to discuss the recent info about MBIA Inc. (NYSE:MBI).
How have hedgies been trading MBIA Inc. (NYSE:MBI)?
Heading into Q3, a total of 40 of the hedge funds we track held long positions in this stock, a change of 48% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were increasing their holdings considerably.
When using filings from the hedgies we track, Arrowgrass Capital Partners, managed by Nick Niell, holds the largest position in MBIA Inc. (NYSE:MBI). Arrowgrass Capital Partners has a $86.6 million position in the stock, comprising 8.9% of its 13F portfolio. The second largest stake is held by Centerbridge Partners, managed by Mark T. Gallogly, which held a $66.3 million position; the fund has 6.6% of its 13F portfolio invested in the stock. Remaining hedge funds with similar optimism include Bruce J. Richards and Louis Hanover’s Marathon Asset Management, Ron Gutfleish’s Elm Ridge Capital and Irving Kahn’s Kahn Brothers.
Consequently, certain money managers were leading the bulls’ herd. Arrowgrass Capital Partners, managed by Nick Niell, created the biggest position in MBIA Inc. (NYSE:MBI). Arrowgrass Capital Partners had 86.6 million invested in the company at the end of the quarter. Mark T. Gallogly’s Centerbridge Partners also made a $66.3 million investment in the stock during the quarter. The other funds with brand new MBI positions are Bruce J. Richards and Louis Hanover’s Marathon Asset Management, Ron Gutfleish’s Elm Ridge Capital, and Irving Kahn’s Kahn Brothers.
Insider trading activity in MBIA Inc. (NYSE:MBI)
Insider buying made by high-level executives is particularly usable when the primary stock in question has experienced transactions within the past half-year. Over the last 180-day time period, MBIA Inc. (NYSE:MBI) has experienced zero unique insiders buying, and 1 insider sales (see the details of insider trades here).
We’ll also take a look at the relationship between both of these indicators in other stocks similar to MBIA Inc. (NYSE:MBI). These stocks are Platinum Underwriters Holdings, Ltd. (NYSE:PTP), Mercury General Corporation (NYSE:MCY), Enstar Group Ltd. (NASDAQ:ESGR), Endurance Specialty Holdings Ltd. (NYSE:ENH), and Kemper Corporation (NYSE:KMPR). All of these stocks are in the property & casualty insurance industry and their market caps resemble MBI’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Platinum Underwriters Holdings, Ltd. (NYSE:PTP) | 11 | 0 | 6 |
| Mercury General Corporation (NYSE:MCY) | 6 | 0 | 6 |
| Enstar Group Ltd. (NASDAQ:ESGR) | 12 | 1 | 2 |
| Endurance Specialty Holdings Ltd. (NYSE:ENH) | 10 | 1 | 5 |
| Kemper Corporation (NYSE:KMPR) | 10 | 0 | 4 |
Using the results explained by the previously mentioned analyses, regular investors should always watch hedge fund and insider trading activity, and MBIA Inc. (NYSE:MBI) is no exception.
