ACE ( ACE) is a commercial property-casual insurer with a pretty simple goal: The firm provides major corporations with insurance against catastrophic losses. That may sound pretty straightforward (all insurers sell themselves the same way, right?), but in fact ACE is positioned in a tight niche with big barriers to entry that smaller rivals can't match. Because ACE has considerable scale, it's able to pursue lucrative less-commoditized deals with bigger customers who can't realistically be insured by a smaller or less-specialized firm. >>5 Rocket Stocks Ready for Blastoff To be fair, insurance isn't completely straightforward, as ACE's investors have learned. The catastrophic insurance business can be extremely profitable when times are good, but it can also be treacherous when risks aren't adequately covered. That's an area where ACE has left much to be desired lately. Not only did the firm carry a riskier portfolio during the recession, but it's also been dealing with more insurance losses than its models counted on in the last few years. But as the company rights the ship, it's started to look more attractive as an investment. Hedge funds agree too. Our small preview group picked up nearly a half million shares in the most recent quarter, quadrupling their bets on ACE since last quarter. Oct. 23 earnings should reveal more details about this stock's improvements in 2013.