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Here is What Hedge Funds Think About W.R. Berkley Corporation (WRB)

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The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 873 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of June 30th. In this article we look at what those investors think of W.R. Berkley Corporation (NYSE:WRB).

W.R. Berkley Corporation (NYSE:WRB) has seen an increase in enthusiasm from smart money in recent months. W.R. Berkley Corporation (NYSE:WRB) was in 36 hedge funds' portfolios at the end of June. The all time high for this statistic is 37. There were 32 hedge funds in our database with WRB holdings at the end of March. Our calculations also showed that WRB isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Robert Pohly of Samlyn Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, we like undervalued, EBITDA-positive growth stocks, so we are checking out stock pitches like this emerging biotech stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we're going to analyze the recent hedge fund action surrounding W.R. Berkley Corporation (NYSE:WRB).

Do Hedge Funds Think WRB Is A Good Stock To Buy Now?

Heading into the third quarter of 2021, a total of 36 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 13% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in WRB over the last 24 quarters. With hedge funds' sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

Is WRB A Good Stock To Buy?
Is WRB A Good Stock To Buy?

The largest stake in W.R. Berkley Corporation (NYSE:WRB) was held by BloombergSen, which reported holding $110.1 million worth of stock at the end of June. It was followed by Polar Capital with a $96.8 million position. Other investors bullish on the company included D E Shaw, Samlyn Capital, and Millennium Management. In terms of the portfolio weights assigned to each position BloombergSen allocated the biggest weight to W.R. Berkley Corporation (NYSE:WRB), around 5.79% of its 13F portfolio. Gillson Capital is also relatively very bullish on the stock, setting aside 2.71 percent of its 13F equity portfolio to WRB.

Now, specific money managers were leading the bulls' herd. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, initiated the most valuable position in W.R. Berkley Corporation (NYSE:WRB). Arrowstreet Capital had $11.4 million invested in the company at the end of the quarter. Paul Tudor Jones's Tudor Investment Corp also made a $1.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Alec Litowitz and Ross Laser's Magnetar Capital, Peter Muller's PDT Partners, and Greg Eisner's Engineers Gate Manager.

Let's check out hedge fund activity in other stocks similar to W.R. Berkley Corporation (NYSE:WRB). These stocks are Vedanta Ltd (NYSE:VEDL), Equitable Holdings, Inc. (NYSE:EQH), Hasbro, Inc. (NASDAQ:HAS), Camden Property Trust (NYSE:CPT), Athene Holding Ltd. (NYSE:ATH), Tenaris S.A. (NYSE:TS), and Packaging Corporation Of America (NYSE:PKG). All of these stocks' market caps match WRB's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VEDL,10,63949,0 EQH,45,1750676,1 HAS,27,211638,-4 CPT,21,440978,-3 ATH,43,1645361,-1 TS,14,267623,4 PKG,31,444749,2 Average,27.3,689282,-0.1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 27.3 hedge funds with bullish positions and the average amount invested in these stocks was $689 million. That figure was $649 million in WRB's case. Equitable Holdings, Inc. (NYSE:EQH) is the most popular stock in this table. On the other hand Vedanta Ltd (NYSE:VEDL) is the least popular one with only 10 bullish hedge fund positions. W.R. Berkley Corporation (NYSE:WRB) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for WRB is 75.3. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 21.8% in 2021 through October 11th and still beat the market by 4.4 percentage points. Hedge funds were also right about betting on WRB as the stock returned 3% since the end of Q2 (through 10/11) 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.