A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Arch Capital Group Ltd. (NASDAQ:ACGL).
Arch Capital Group Ltd. (NASDAQ:ACGL) investors should pay attention to an increase in hedge fund interest recently. Arch Capital Group Ltd. (NASDAQ:ACGL) was in 41 hedge funds’ portfolios at the end of September. The all time high for this statistic is 36. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 36 hedge funds in our database with ACGL positions at the end of the second quarter. Our calculations also showed that ACGL isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
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Sander Gerber of Hudson Bay Capital Management
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Do Hedge Funds Think ACGL Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 41 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 14% from one quarter earlier. On the other hand, there were a total of 22 hedge funds with a bullish position in ACGL a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, FPR Partners held the most valuable stake in Arch Capital Group Ltd. (NASDAQ:ACGL), which was worth $404.1 million at the end of the third quarter. On the second spot was Polar Capital which amassed $154.7 million worth of shares. Point72 Asset Management, Citadel Investment Group, and Echo Street Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position FPR Partners allocated the biggest weight to Arch Capital Group Ltd. (NASDAQ:ACGL), around 13.89% of its 13F portfolio. Steel Canyon Capital is also relatively very bullish on the stock, designating 9.37 percent of its 13F equity portfolio to ACGL.
As industrywide interest jumped, specific money managers were breaking ground themselves. King Street Capital, managed by Brian J. Higgins, initiated the most valuable position in Arch Capital Group Ltd. (NASDAQ:ACGL). King Street Capital had $30.3 million invested in the company at the end of the quarter. Anand Parekh’s Alyeska Investment Group also initiated a $9.7 million position during the quarter. The other funds with new positions in the stock are Sander Gerber’s Hudson Bay Capital Management, Gregg Moskowitz’s Interval Partners, and Parvinder Thiara’s Athanor Capital.
Let’s now review hedge fund activity in other stocks similar to Arch Capital Group Ltd. (NASDAQ:ACGL). We will take a look at M&T Bank Corporation (NYSE:MTB), Atmos Energy Corporation (NYSE:ATO), Wabtec Corporation (NYSE:WAB), Live Nation Entertainment, Inc. (NYSE:LYV), Pembina Pipeline Corp (NYSE:PBA), Cheniere Energy, Inc. (NYSE:LNG), and KeyCorp (NYSE:KEY). This group of stocks’ market caps match ACGL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MTB | 35 | 503738 | 5 |
| ATO | 18 | 110743 | -4 |
| WAB | 38 | 1732099 | -1 |
| LYV | 50 | 1716514 | 6 |
| PBA | 12 | 56123 | 2 |
| LNG | 40 | 1971024 | 2 |
| KEY | 33 | 249262 | -4 |
| Average | 32.3 | 905643 | 0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.3 hedge funds with bullish positions and the average amount invested in these stocks was $906 million. That figure was $1229 million in ACGL’s case. Live Nation Entertainment, Inc. (NYSE:LYV) is the most popular stock in this table. On the other hand Pembina Pipeline Corp (NYSE:PBA) is the least popular one with only 12 bullish hedge fund positions. Arch Capital Group Ltd. (NASDAQ:ACGL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ACGL is 78.2. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on ACGL as the stock returned 14.8% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
