To most shareholders, hedge funds are viewed as slow, old financial tools of years past. While there are more than 8000 funds trading at the moment, we choose to focus on the moguls of this club, around 450 funds. It is widely believed that this group oversees the majority of the hedge fund industry’s total asset base, and by keeping an eye on their best stock picks, we have revealed a number of investment strategies that have historically outstripped 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 topped the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Just as beneficial, positive insider trading sentiment is another way to parse down the world of equities. Obviously, there are many incentives for an insider to drop shares of his or her company, but just one, very obvious reason why they would behave bullishly. Many empirical studies have demonstrated the useful potential of this tactic if you know what to do (learn more here).
Now, it’s important to take a gander at the recent action regarding Huaneng Power International Inc (ADR) (NYSE:HNP).
What does the smart money think about Huaneng Power International Inc (ADR) (NYSE:HNP)?
At the end of the first quarter, a total of 5 of the hedge funds we track held long positions in this stock, a change of 0% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their stakes considerably.
When looking at the hedgies we track, Jim Simons’s Renaissance Technologies had the biggest position in Huaneng Power International Inc (ADR) (NYSE:HNP), worth close to $1.8 million, comprising less than 0.1%% of its total 13F portfolio. Coming in second is Citadel Investment Group, managed by Ken Griffin, which held a $1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedgies that hold long positions include Matthew Hulsizer’s PEAK6 Capital Management, Israel Englander’s Millennium Management and Jane Mendillo’s Harvard Management Co.
Because Huaneng Power International Inc (ADR) (NYSE:HNP) has experienced bearish sentiment from the smart money, we can see that there exists a select few hedge funds that slashed their full holdings at the end of the first quarter. Intriguingly, Mike Vranos’s Ellington cut the biggest investment of the “upper crust” of funds we watch, worth close to $0.3 million in stock.. David Costen Haley’s fund, HBK Investments, also cut its stock, about $0.2 million worth. These bearish behaviors are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
What do corporate executives and insiders think about Huaneng Power International Inc (ADR) (NYSE:HNP)?
Insider buying is most useful when the company in question has seen transactions within the past half-year. Over the latest 180-day time frame, Huaneng Power International Inc (ADR) (NYSE:HNP) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Huaneng Power International Inc (ADR) (NYSE:HNP). These stocks are FirstEnergy Corp. (NYSE:FE), Korea Electric Power Corporation (ADR) (NYSE:KEP), Edison International (NYSE:EIX), Xcel Energy Inc (NYSE:XEL), and Empresa Nacional de Electricidad (ADR) (NYSE:EOC). This group of stocks belong to the electric utilities industry and their market caps are similar to HNP’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| FirstEnergy Corp. (NYSE:FE) | 16 | 0 | 10 |
| Korea Electric Power Corporation (ADR) (NYSE:KEP) | 9 | 0 | 0 |
| Edison International (NYSE:EIX) | 20 | 0 | 6 |
| Xcel Energy Inc (NYSE:XEL) | 13 | 3 | 0 |
| Empresa Nacional de Electricidad (ADR) (NYSE:EOC) | 7 | 0 | 0 |
With the results exhibited by our strategies, retail investors must always monitor hedge fund and insider trading sentiment, and Huaneng Power International Inc (ADR) (NYSE:HNP) shareholders fit into this picture quite nicely.
