Is it smart to be bullish on The Hanover Insurance Group, Inc. (NYSE:THG)?
In the eyes of many of your peers, hedge funds are assumed to be bloated, old investment vehicles of an era lost to time. Although there are more than 8,000 hedge funds in operation currently, this site looks at the upper echelon of this club, close to 525 funds. Analysts calculate that this group controls most of the hedge fund industry’s total capital, and by tracking their highest performing stock picks, we’ve unearthed a few investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).
Equally as necessary, bullish insider trading activity is another way to look at the investments you’re interested in. There are a variety of stimuli for an executive to downsize shares of his or her company, but just one, very obvious reason why they would behave bullishly. Plenty of empirical studies have demonstrated the market-beating potential of this method if shareholders understand where to look (learn more here).
Keeping this in mind, let’s analyze the latest info surrounding The Hanover Insurance Group, Inc. (NYSE:THG).
How are hedge funds trading The Hanover Insurance Group, Inc. (NYSE:THG)?
In preparation for the third quarter, a total of 14 of the hedge funds we track held long positions in this stock, a change of 40% from the first quarter. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were boosting their stakes substantially.
When using filings from the hedgies we track, David Dreman’s Dreman Value Management had the biggest position in The Hanover Insurance Group, Inc. (NYSE:THG), worth close to $31.8 million, accounting for 1% of its total 13F portfolio. Coming in second is AQR Capital Management, managed by Cliff Asness, which held a $6.7 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other hedgies that are bullish include Israel Englander’s Millennium Management, Glenn Russell Dubin’s Highbridge Capital Management and Ken Griffin’s Citadel Investment Group.
As aggregate interest spiked, certain bigger names have jumped into The Hanover Insurance Group, Inc. (NYSE:THG) headfirst. Dreman Value Management, managed by David Dreman, established the most valuable position in The Hanover Insurance Group, Inc. (NYSE:THG). Dreman Value Management had 31.8 million invested in the company at the end of the quarter. Cliff Asness’s AQR Capital Management also initiated a $6.7 million position during the quarter. The following funds were also among the new THG investors: Israel Englander’s Millennium Management, Glenn Russell Dubin’s Highbridge Capital Management, and Ken Griffin’s Citadel Investment Group.
How have insiders been trading The Hanover Insurance Group, Inc. (NYSE:THG)?
Insider buying is at its handiest when the company in question has seen transactions within the past six months. Over the latest 180-day time period, The Hanover Insurance Group, Inc. (NYSE:THG) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
We’ll also examine the relationship between both of these indicators in other stocks similar to The Hanover Insurance Group, Inc. (NYSE:THG). These stocks are Endurance Specialty Holdings Ltd. (NYSE:ENH), Enstar Group Ltd. (NASDAQ:ESGR), Mercury General Corporation (NYSE:MCY), American National Insurance Company (NASDAQ:ANAT), and Amtrust Financial Services, Inc. (NASDAQ:AFSI). All of these stocks are in the property & casualty insurance industry and their market caps resemble THG’s market cap.
