This Metric Says You Are Smart to Sell Amtrust Financial Services, Inc. (AFSI)

Amtrust Financial Services, Inc. (NASDAQ:AFSI) has experienced a decrease in support from the world’s most elite money managers lately.

In the 21st century investor’s toolkit, there are a multitude of metrics market participants can use to track their holdings. A pair of the most useful are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top fund managers can trounce the market by a solid amount (see just how much).

Equally as key, optimistic insider trading sentiment is a second way to parse down the world of equities. Obviously, there are lots of incentives for an executive to get rid of shares of his or her company, but just one, very clear reason why they would behave bullishly. Many academic studies have demonstrated the impressive potential of this tactic if shareholders understand what to do (learn more here).

With all of this in mind, let’s take a glance at the latest action encompassing Amtrust Financial Services, Inc. (NASDAQ:AFSI).

Hedge fund activity in Amtrust Financial Services, Inc. (NASDAQ:AFSI)

At the end of the fourth quarter, a total of 10 of the hedge funds we track held long positions in this stock, a change of -9% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their stakes significantly.

When looking at the hedgies we track, Jim Simons’s Renaissance Technologies had the most valuable position in Amtrust Financial Services, Inc. (NASDAQ:AFSI), worth close to $7.1 million, comprising less than 0.1%% of its total 13F portfolio. On Renaissance Technologies’s heels is Murray Stahl of Horizon Asset Management, with a $3.5 million position; 0.1% of its 13F portfolio is allocated to the company. Some other peers that are bullish include Jay Petschek and Steven Major’s Corsair Capital Management, Israel Englander’s Millennium Management and D. E. Shaw’s D E Shaw.

Since Amtrust Financial Services, Inc. (NASDAQ:AFSI) has faced falling interest from the smart money, it’s easy to see that there lies a certain “tier” of money managers who were dropping their entire stakes heading into 2013. Intriguingly, Geoffrey S. McCuskey’s Riverside Advisors dumped the biggest position of the “upper crust” of funds we watch, totaling about $3.7 million in stock., and Paul Tudor Jones of Tudor Investment Corp was right behind this move, as the fund dropped about $0.5 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 1 funds heading into 2013.

How have insiders been trading Amtrust Financial Services, Inc. (NASDAQ:AFSI)?

Insider trading activity, especially when it’s bullish, is particularly usable when the company we’re looking at has seen transactions within the past six months. Over the latest 180-day time frame, Amtrust Financial Services, Inc. (NASDAQ:AFSI) has seen zero unique insiders buying, and 3 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to Amtrust Financial Services, Inc. (NASDAQ:AFSI). These stocks are Enstar Group Ltd. (NASDAQ:ESGR), Mercury General Corporation (NYSE:MCY), Corelogic Inc (NYSE:CLGX), The Hanover Insurance Group, Inc. (NYSE:THG), and American National Insurance Company (NASDAQ:ANAT). This group of stocks are in the property & casualty insurance industry and their market caps are closest to AFSI’s market cap.

With the results demonstrated by our research, everyday investors must always monitor hedge fund and insider trading activity, and Amtrust Financial Services, Inc. (NASDAQ:AFSI) is an important part of this process.

Click here to learn why you should track hedge funds