The Chubb Corporation (CB): Hedge Funds Are Bearish and Insiders Are Undecided, What Should You Do?

Is The Chubb Corporation (NYSE:CB) a buy?

At the moment, there are tons of indicators investors can use to monitor their holdings. A pair of the best are hedge fund and insider trading sentiment. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best hedge fund managers can beat the S&P 500 by a very impressive amount (see just how much).

Equally as crucial, positive insider trading activity is another way to look at the investments you’re interested in. Obviously, there are a number of stimuli for an executive to drop shares of his or her company, but only one, very clear reason why they would initiate a purchase. Various empirical studies have demonstrated the market-beating potential of this tactic if you understand where to look (learn more here).

Keeping this in mind, it’s important to analyze the recent info about The Chubb Corporation (NYSE:CB).

What have hedge funds been doing with The Chubb Corporation (NYSE:CB)?

In preparation for the third quarter, a total of 30 of the hedge funds we track held long positions in this stock, a change of -6% from the first quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes meaningfully.

When using filings from the hedgies we track, Polaris Capital Management, managed by Bernard Horn, holds the biggest position in The Chubb Corporation (NYSE:CB). Polaris Capital Management has a $52.8 million position in the stock, comprising 3% of its 13F portfolio. Coming in second is Jim Simons of Renaissance Technologies, with a $51.9 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other hedge funds that are bullish include Phill Gross and Robert Atchinson’s Adage Capital Management, David Harding’s Winton Capital Management and Andrew Sandler’s Sandler Capital Management.

Judging by the fact that The Chubb Corporation (NYSE:CB) has faced a fall in interest from the smart money’s best and brightest, logic holds that there is a sect of funds who were dropping their positions entirely heading into Q2. Interestingly, Ric Dillon’s Diamond Hill Capital said goodbye to the largest stake of the “upper crust” of funds we monitor, totaling close to $82.5 million in call options., and Bruce Kovner of Caxton Associates LP was right behind this move, as the fund said goodbye to about $17.5 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 2 funds heading into Q2.

What do corporate executives and insiders think about The Chubb Corporation (NYSE:CB)?

Insider buying made by high-level executives is most useful when the company we’re looking at has experienced transactions within the past six months. Over the last half-year time period, The Chubb Corporation (NYSE:CB) has experienced zero unique insiders purchasing, and 8 insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to The Chubb Corporation (NYSE:CB). These stocks are The Progressive Corporation (NYSE:PGR), Travelers Companies Inc (NYSE:TRV), ACE Limited (NYSE:ACE), Loews Corporation (NYSE:L), and The Allstate Corporation (NYSE:ALL). This group of stocks belong to the property & casualty insurance industry and their market caps are closest to CB’s market cap.