This Metric Says You Are Smart to Buy Genworth Financial Inc (GNW)

Genworth Financial Inc (NYSE:GNW) was in 39 hedge funds’ portfolio at the end of March. GNW has experienced an increase in support from the world’s most elite money managers in recent months. There were 38 hedge funds in our database with GNW positions at the end of the previous quarter.

In today’s marketplace, there are tons of methods market participants can use to analyze stocks. A pair of the best are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top investment managers can trounce the S&P 500 by a solid margin (see just how much).

Equally as key, bullish insider trading activity is a second way to parse down the financial markets. As the old adage goes: there are plenty of motivations for an executive to cut shares of his or her company, but only one, very obvious reason why they would buy. Various empirical studies have demonstrated the market-beating potential of this strategy if shareholders understand what to do (learn more here).

Now, let’s take a look at the latest action encompassing Genworth Financial Inc (NYSE:GNW).

What does the smart money think about Genworth Financial Inc (NYSE:GNW)?

In preparation for this quarter, a total of 39 of the hedge funds we track were long in this stock, a change of 3% from the first quarter. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their holdings substantially.

According to our comprehensive database, Jonathon Jacobson’s Highfields Capital Management had the biggest position in Genworth Financial Inc (NYSE:GNW), worth close to $131.7 million, comprising 1.2% of its total 13F portfolio. Coming in second is John Paulson of Paulson & Co, with a $90 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Some other hedge funds that are bullish include Edward Lampert’s ESL Investments, Bill Miller’s Legg Mason Capital Management and Jim Simons’s Renaissance Technologies.

As industrywide interest jumped, key money managers have jumped into Genworth Financial Inc (NYSE:GNW) headfirst. ZWEIG DIMENNA PARTNERS, managed by Joe DiMenna, assembled the biggest position in Genworth Financial Inc (NYSE:GNW). ZWEIG DIMENNA PARTNERS had 22.2 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $10.9 million position during the quarter. The other funds with new positions in the stock are Bruce Kovner’s Caxton Associates LP, John Murphy’s Alydar Capital, and Bruce Berkowitz’s Fairholme (FAIRX).

What do corporate executives and insiders think about Genworth Financial Inc (NYSE:GNW)?

Bullish insider trading is at its handiest when the company we’re looking at has seen transactions within the past half-year. Over the last 180-day time frame, Genworth Financial Inc (NYSE:GNW) has seen 1 unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Genworth Financial Inc (NYSE:GNW). These stocks are Lincoln National Corporation (NYSE:LNC), Protective Life Corp. (NYSE:PL), Torchmark Corporation (NYSE:TMK), and Reinsurance Group of America Inc (NYSE:RGA). This group of stocks are the members of the life insurance industry and their market caps resemble GNW’s market cap.

With the returns demonstrated by Insider Monkey’s tactics, retail investors must always monitor hedge fund and insider trading activity, and Genworth Financial Inc (NYSE:GNW) is no exception.

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