To most shareholders, hedge funds are assumed to be slow, outdated investment tools of yesteryear. While there are over 8000 funds with their doors open today, we at Insider Monkey hone in on the top tier of this group, around 450 funds. It is widely believed that this group has its hands on the lion’s share of all hedge funds’ total asset base, and by monitoring their best picks, we have figured out 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 per year 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 beaten the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Equally as important, optimistic insider trading sentiment is a second way to parse down the investments you’re interested in. There are many stimuli for an insider to cut shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Various empirical studies have demonstrated the useful potential of this method if investors know where to look (learn more here).
With these “truths” under our belt, let’s take a gander at the key action surrounding Avista Corp (NYSE:AVA).
How are hedge funds trading Avista Corp (NYSE:AVA)?
In preparation for this quarter, a total of 11 of the hedge funds we track were bullish in this stock, a change of 0% from one quarter earlier. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes substantially.
Of the funds we track, Fisher Asset Management, managed by Ken Fisher, holds the largest position in Avista Corp (NYSE:AVA). Fisher Asset Management has a $27 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Clint Carlson of Carlson Capital, with a $14.8 million position; 0.2% of its 13F portfolio is allocated to the stock. Some other hedge funds that hold long positions include Ken Griffin’s Citadel Investment Group, D. E. Shaw’s D E Shaw and Ken Gray and Steve Walsh’s Bryn Mawr Capital.
Because Avista Corp (NYSE:AVA) has faced falling interest from the aggregate hedge fund industry, it’s safe to say that there were a few hedge funds that elected to cut their positions entirely last quarter. Intriguingly, Matthew Tewksbury’s Stevens Capital Management sold off the biggest position of the “upper crust” of funds we watch, totaling about $0.6 million in stock., and Paul Tudor Jones of Tudor Investment Corp was right behind this move, as the fund said goodbye to about $0.5 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Insider trading activity in Avista Corp (NYSE:AVA)
Insider buying is particularly usable when the company in question has experienced transactions within the past six months. Over the latest half-year time period, Avista Corp (NYSE:AVA) has experienced zero unique insiders buying, and 7 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to Avista Corp (NYSE:AVA). These stocks are Otter Tail Corporation (NASDAQ:OTTR), MGE Energy, Inc. (NASDAQ:MGEE), ALLETE Inc (NYSE:ALE), PNM Resources, Inc. (NYSE:PNM), and NorthWestern Corp (NYSE:NWE). All of these stocks are in the diversified utilities industry and their market caps are similar to AVA’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Otter Tail Corporation (NASDAQ:OTTR) | 6 | 0 | 3 |
| MGE Energy, Inc. (NASDAQ:MGEE) | 5 | 1 | 0 |
| ALLETE Inc (NYSE:ALE) | 6 | 0 | 7 |
| PNM Resources, Inc. (NYSE:PNM) | 15 | 0 | 6 |
| NorthWestern Corp (NYSE:NWE) | 11 | 1 | 0 |
With the returns shown by Insider Monkey’s strategies, everyday investors must always keep an eye on hedge fund and insider trading sentiment, and Avista Corp (NYSE:AVA) shareholders fit into this picture quite nicely.
