Should You Sell Argo Group International Holdings, Ltd. (AGII)?
What's a smart Argo Group International Holdings, Ltd. (NASDAQ:AGII) investor to do?
In the eyes of many market players, hedge funds are assumed to be useless, outdated financial tools of an era lost to time. Although there are over 8,000 hedge funds with their doors open in present day, this site aim at the bigwigs of this club, about 525 funds. Analysts calculate that this group controls most of all hedge funds' total capital, and by keeping an eye on their best picks, we've brought to light a number of investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually 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 trumped the S&P 500 index by 33 percentage points in 11 months (find a sample of our picks).
Equally as crucial, bullish insider trading activity is another way to analyze the financial markets. As the old adage goes: there are a number of reasons for a corporate insider to get rid of shares of his or her company, but only one, very clear reason why they would buy. Plenty of academic studies have demonstrated the valuable potential of this tactic if "monkeys" understand where to look (learn more here).
Thus, let's discuss the recent info surrounding Argo Group International Holdings, Ltd. (NASDAQ:AGII).
What have hedge funds been doing with Argo Group International Holdings, Ltd. (NASDAQ:AGII)?
At Q2's end, a total of 12 of the hedge funds we track were long in this stock, a change of 0% from the previous quarter. With the smart money's sentiment swirling, there exists a few notable hedge fund managers who were boosting their holdings substantially.
Out of the hedge funds we follow, Richard S. Pzena's Pzena Investment Management had the biggest position in Argo Group International Holdings, Ltd. (NASDAQ:AGII), worth close to $39.6 million, accounting for 0.3% of its total 13F portfolio. The second largest stake is held by AQR Capital Management, managed by Cliff Asness, which held a $13.8 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other hedge funds with similar optimism include Chuck Royce's Royce & Associates, David Dreman's Dreman Value Management and SAC Subsidiary's CR Intrinsic Investors.
As Argo Group International Holdings, Ltd. (NASDAQ:AGII) has faced declining interest from the entirety of the hedge funds we track, we can see that there were a few hedge funds that slashed their entire stakes last quarter. Interestingly, Gregory Fraser Rudolph Kluiber and Timothy Kroch's GRT Capital Partners cut the biggest stake of the 450+ funds we watch, valued at about $0.3 million in stock. Paul Tudor Jones's fund, Tudor Investment Corp, also cut its stock, about $0.2 million worth. These transactions are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Insider trading activity in Argo Group International Holdings, Ltd. (NASDAQ:AGII)
Bullish insider trading is best served when the company in focus has seen transactions within the past half-year. Over the last 180-day time period, Argo Group International Holdings, Ltd. (NASDAQ:AGII) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We'll also review the relationship between both of these indicators in other stocks similar to Argo Group International Holdings, Ltd. (NASDAQ:AGII). These stocks are Greenlight Capital Re, Ltd. (NASDAQ:GLRE), Hilltop Holdings Inc. (NYSE:HTH), Tower Group International Ltd (NASDAQ:TWGP), FBL Financial Group (NYSE:FFG), and MGIC Investment Corp. (NYSE:MTG). All of these stocks are in the property & casualty insurance industry and their market caps are similar to AGII's market cap.
# of Hedge Funds
# of Insiders Buying
# of Insiders Selling
Greenlight Capital Re, Ltd. (NASDAQ:GLRE)
Hilltop Holdings Inc. (NYSE:HTH)
Tower Group International Ltd (NASDAQ:TWGP)
FBL Financial Group (NYSE:FFG)
MGIC Investment Corp. (NYSE:MTG)
Using the returns explained by the previously mentioned analyses, average investors must always watch hedge fund and insider trading activity, and Argo Group International Holdings, Ltd. (NASDAQ:AGII) is an important part of this process.