This Metric Says You Are Smart to Buy Protective Life Corp. (PL)

In the eyes of many investors, hedge funds are viewed as useless, old financial tools of a forgotten age. Although there are more than 8,000 hedge funds in operation currently, this site aim at the bigwigs of this club, close to 525 funds. It is widely held that this group oversees the lion’s share of the smart money’s total capital, and by watching their best investments, we’ve uncovered a few investment strategies that have historically beaten the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 33 percentage points in 11 months (find the details here).

Equally as necessary, positive insider trading sentiment is another way to analyze the investments you’re interested in. Just as you’d expect, there are lots of stimuli for a corporate insider to cut shares of his or her company, but just one, very simple reason why they would behave bullishly. Several academic studies have demonstrated the impressive potential of this strategy if you know what to do (learn more here).

Keeping this in mind, let’s study the latest info about Protective Life Corp. (NYSE:PL).

Hedge fund activity in Protective Life Corp. (NYSE:PL)

At the end of the second quarter, a total of 17 of the hedge funds we track were bullish in this stock, a change of 21% from the first quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes significantly.

According to our 13F database, Fisher Asset Management, managed by Ken Fisher, holds the most valuable position in Protective Life Corp. (NYSE:PL). Fisher Asset Management has a $69.2 million position in the stock, comprising 0.2% of its 13F portfolio. On Fisher Asset Management’s heels is Citadel Investment Group, managed by Ken Griffin, which held a $35.9 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining hedge funds that are bullish include Cliff Asness’s AQR Capital Management, David Dreman’s Dreman Value Management and Richard S. Pzena’s Pzena Investment Management.

As industrywide interest increased, certain bigger names were breaking ground themselves. Fisher Asset Management, managed by Ken Fisher, established the biggest position in Protective Life Corp. (NYSE:PL). Fisher Asset Management had 69.2 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $35.9 million position during the quarter. The other funds with new positions in the stock are Cliff Asness’s AQR Capital Management, David Dreman’s Dreman Value Management, and Richard S. Pzena’s Pzena Investment Management.

What do corporate executives and insiders think about Protective Life Corp. (NYSE:PL)?

Bullish insider trading is particularly usable when the company in question has seen transactions within the past 180 days. Over the last half-year time period, Protective Life Corp. (NYSE:PL) 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 Protective Life Corp. (NYSE:PL). These stocks are Genworth Financial Inc (NYSE:GNW), Symetra Financial Corporation (NYSE:SYA), Reinsurance Group of America Inc (NYSE:RGA), Primerica, Inc. (NYSE:PRI), and Aviva Plc (ADR) (NYSE:AV). This group of stocks belong to the life insurance industry and their market caps resemble PL’s market cap.

Using the results explained by the previously mentioned strategies, regular investors must always keep one eye on hedge fund and insider trading activity, and Protective Life Corp. (NYSE:PL) is an important part of this process.

Discover how hedge fund piggybacking can benefit you