This Metric Says You Are Smart to Sell United Fire Group, Inc. (UFCS)

United Fire Group, Inc. (NASDAQ:UFCS) was in 7 hedge funds’ portfolio at the end of March. UFCS shareholders have witnessed a decrease in support from the world’s most elite money managers in recent months. There were 11 hedge funds in our database with UFCS holdings at the end of the previous quarter.

At the moment, there are a multitude of metrics market participants can use to monitor Mr. Market. A pair of the most innovative are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite money managers can outpace the broader indices by a solid amount (see just how much).

Equally as key, positive insider trading sentiment is another way to break down the financial markets. As the old adage goes: there are many reasons for an executive to sell shares of his or her company, but only one, very simple reason why they would initiate a purchase. Many academic studies have demonstrated the market-beating potential of this tactic if shareholders know where to look (learn more here).

Now, let’s take a gander at the key action encompassing United Fire Group, Inc. (NASDAQ:UFCS).

Hedge fund activity in United Fire Group, Inc. (NASDAQ:UFCS)

At Q1’s end, a total of 7 of the hedge funds we track were bullish in this stock, a change of -36% from the previous quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings considerably.

When looking at the hedgies we track, Israel Englander’s Millennium Management had the largest position in United Fire Group, Inc. (NASDAQ:UFCS), worth close to $11.7 million, accounting for 0.1% of its total 13F portfolio. On Millennium Management’s heels is Chuck Royce of Royce & Associates, with a $3.6 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers with similar optimism include Ken Griffin’s Citadel Investment Group, D. E. Shaw’s D E Shaw and John Overdeck and David Siegel’s Two Sigma Advisors.

Since United Fire Group, Inc. (NASDAQ:UFCS) has faced bearish sentiment from the entirety of the hedge funds we track, we can see that there exists a select few fund managers that elected to cut their full holdings at the end of the first quarter. Interestingly, Ric Dillon’s Diamond Hill Capital dropped the largest position of the 450+ funds we key on, comprising about $3.3 million in stock., and SAC Subsidiary of CR Intrinsic Investors was right behind this move, as the fund sold off about $0.5 million worth. These transactions are important to note, as total hedge fund interest dropped by 4 funds at the end of the first quarter.

How are insiders trading United Fire Group, Inc. (NASDAQ:UFCS)?

Insider trading activity, especially when it’s bullish, is best served when the primary stock in question has seen transactions within the past six months. Over the latest half-year time frame, United Fire Group, Inc. (NASDAQ:UFCS) has seen 3 unique insiders purchasing, and 6 insider sales (see the details of insider trades here).

Let’s check out hedge fund and insider activity in other stocks similar to United Fire Group, Inc. (NASDAQ:UFCS). These stocks are Global Indemnity plc (NASDAQ:GBLI), State Auto Financial (NASDAQ:STFC), National Interstate Corporation (NASDAQ:NATL), Infinity Property and Casualty Corp. (NASDAQ:IPCC), and Amerisafe, Inc. (NASDAQ:AMSF). This group of stocks are the members of the property & casualty insurance industry and their market caps match UFCS’s market cap.