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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. Insider Monkey finished processing 817 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of September 30th, 2020. What do these smart investors think about Safety Insurance Group, Inc. (NASDAQ:SAFT)?
Is Safety Insurance Group, Inc. (NASDAQ:SAFT) the right investment to pursue these days? Hedge funds were in an optimistic mood. The number of bullish hedge fund positions inched up by 4 recently. Safety Insurance Group, Inc. (NASDAQ:SAFT) was in 17 hedge funds' portfolios at the end of September. The all time high for this statistic is 15. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that SAFT 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). There were 13 hedge funds in our database with SAFT holdings at the end of June.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Paul Marshall of Marshall Wace
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. Keeping this in mind let's view the key hedge fund action surrounding Safety Insurance Group, Inc. (NASDAQ:SAFT).
Do Hedge Funds Think SAFT Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 31% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in SAFT over the last 21 quarters. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in Safety Insurance Group, Inc. (NASDAQ:SAFT), which was worth $24.5 million at the end of the third quarter. On the second spot was Millennium Management which amassed $3.1 million worth of shares. AltraVue Capital, AQR Capital Management, and Citadel Investment Group 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 AltraVue Capital allocated the biggest weight to Safety Insurance Group, Inc. (NASDAQ:SAFT), around 1.41% of its 13F portfolio. Navellier & Associates is also relatively very bullish on the stock, designating 0.09 percent of its 13F equity portfolio to SAFT.
Consequently, specific money managers were breaking ground themselves. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, initiated the most outsized position in Safety Insurance Group, Inc. (NASDAQ:SAFT). Marshall Wace LLP had $1.5 million invested in the company at the end of the quarter. D. E. Shaw's D E Shaw also initiated a $1 million position during the quarter. The following funds were also among the new SAFT investors: Greg Eisner's Engineers Gate Manager, Paul Tudor Jones's Tudor Investment Corp, and Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Safety Insurance Group, Inc. (NASDAQ:SAFT) but similarly valued. These stocks are Cerus Corporation (NASDAQ:CERS), Kiniksa Pharmaceuticals, Ltd. (NASDAQ:KNSA), BP Midstream Partners LP (NYSE:BPMP), TriMas Corp (NASDAQ:TRS), Esperion Therapeutics (NASDAQ:ESPR), BrightSphere Investment Group Inc (NYSE:BSIG), and PGT Innovations Inc. (NYSE:PGTI). This group of stocks' market valuations are similar to SAFT's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CERS,12,112765,-2 KNSA,20,212720,2 BPMP,5,8204,2 TRS,14,70904,-3 ESPR,17,222235,-2 BSIG,25,374125,3 PGTI,11,79133,0 Average,14.9,154298,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.9 hedge funds with bullish positions and the average amount invested in these stocks was $154 million. That figure was $42 million in SAFT's case. BrightSphere Investment Group Inc (NYSE:BSIG) is the most popular stock in this table. On the other hand BP Midstream Partners LP (NYSE:BPMP) is the least popular one with only 5 bullish hedge fund positions. Safety Insurance Group, Inc. (NASDAQ:SAFT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SAFT is 69. 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 SAFT as the stock returned 16.3% 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.