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Is RE Stock A Buy or Sell?

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Abigail Fisher
·5 min read
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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 887 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of December 31st, 2020. In this article we are going to take a look at smart money sentiment towards Everest Re Group Ltd (NYSE:RE).

Is RE stock a buy or sell? Hedge funds were getting less optimistic. The number of long hedge fund bets were cut by 7 lately. Everest Re Group Ltd (NYSE:RE) was in 29 hedge funds' portfolios at the end of December. The all time high for this statistic is 36. Our calculations also showed that RE isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).

Mason Hawkins of Southeastern Asset Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we heard that billionaire Peter Thiel is backing this biotech stock. So, we are taking a closer look at this space. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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 we're going to go over the new hedge fund action regarding Everest Re Group Ltd (NYSE:RE).

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

Heading into the first quarter of 2021, a total of 29 of the hedge funds tracked by Insider Monkey were long this stock, a change of -19% from the previous quarter. On the other hand, there were a total of 24 hedge funds with a bullish position in RE a year ago. With hedgies' sentiment swirling, there exists an "upper tier" of noteworthy hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

More specifically, AQR Capital Management was the largest shareholder of Everest Re Group Ltd (NYSE:RE), with a stake worth $141.8 million reported as of the end of December. Trailing AQR Capital Management was Southeastern Asset Management, which amassed a stake valued at $94.5 million. Polar Capital, Viking Global, and Adage 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 Southeastern Asset Management allocated the biggest weight to Everest Re Group Ltd (NYSE:RE), around 2.11% of its 13F portfolio. Te Ahumairangi Investment Management is also relatively very bullish on the stock, dishing out 1.64 percent of its 13F equity portfolio to RE.

Due to the fact that Everest Re Group Ltd (NYSE:RE) has witnessed a decline in interest from the aggregate hedge fund industry, we can see that there was a specific group of fund managers who sold off their positions entirely in the fourth quarter. Intriguingly, David Rodriguez-Fraile's BlueMar Capital Management sold off the largest position of the "upper crust" of funds followed by Insider Monkey, worth an estimated $3.5 million in stock, and Gregg Moskowitz's Interval Partners was right behind this move, as the fund dropped about $1.7 million worth. These transactions are important to note, as total hedge fund interest dropped by 7 funds in the fourth quarter.

Let's check out hedge fund activity in other stocks similar to Everest Re Group Ltd (NYSE:RE). These stocks are Darling Ingredients Inc. (NYSE:DAR), New Fortress Energy Inc. (NASDAQ:NFE), Amdocs Limited (NASDAQ:DOX), Weibo Corp (NASDAQ:WB), Snap-on Incorporated (NYSE:SNA), Kinross Gold Corporation (NYSE:KGC), and Canopy Growth Corporation (NASDAQ:CGC). All of these stocks' market caps resemble RE's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position DAR,36,667724,5 NFE,11,55372,4 DOX,20,452033,-9 WB,13,90176,0 SNA,26,376125,2 KGC,36,694721,7 CGC,19,133453,10 Average,23,352801,2.7 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $353 million. That figure was $475 million in RE's case. Darling Ingredients Inc. (NYSE:DAR) is the most popular stock in this table. On the other hand New Fortress Energy Inc. (NASDAQ:NFE) is the least popular one with only 11 bullish hedge fund positions. Everest Re Group Ltd (NYSE:RE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for RE is 58.2. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.2% in 2021 through April 12th and still beat the market by 1.5 percentage points. Hedge funds were also right about betting on RE, though not to the same extent, as the stock returned 9.6% since Q4 (through April 12th) and outperformed the market as well.

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Disclosure: None. This article was originally published at Insider Monkey.

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