Do Hedge Funds and Insiders Love Northwest Natural Gas Co (NWN)?

Is Northwest Natural Gas Co (NYSE:NWN) undervalued? The best stock pickers are betting on the stock. The number of bullish hedge fund bets rose by 1 in recent months.

At the moment, there are a multitude of gauges market participants can use to watch stocks. Two of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best fund managers can outpace the market by a very impressive margin (see just how much).

Equally as important, optimistic insider trading activity is a second way to parse down the marketplace. There are a variety of motivations for a corporate insider to downsize shares of his or her company, but just one, very simple reason why they would buy. Various academic studies have demonstrated the valuable potential of this strategy if shareholders understand what to do (learn more here).

With all of this in mind, it’s important to take a peek at the recent action surrounding Northwest Natural Gas Co (NYSE:NWN).

What does the smart money think about Northwest Natural Gas Co (NYSE:NWN)?

At the end of the fourth quarter, a total of 5 of the hedge funds we track held long positions in this stock, a change of 25% from the third quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes considerably.

Of the funds we track, Ken Fisher’s Fisher Asset Management had the most valuable position in Northwest Natural Gas Co (NYSE:NWN), worth close to $11.8 million, accounting for less than 0.1%% of its total 13F portfolio. Coming in second is Ken Griffin of Citadel Investment Group, with a $5.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers with similar optimism include Jim Simons’s Renaissance Technologies, Cliff Asness’s AQR Capital Management and David Costen Haley’s HBK Investments.

Consequently, some big names were breaking ground themselves. AQR Capital Management, managed by Cliff Asness, initiated the most outsized position in Northwest Natural Gas Co (NYSE:NWN). AQR Capital Management had 0.5 million invested in the company at the end of the quarter. David Costen Haley’s HBK Investments also made a $0.3 million investment in the stock during the quarter.

How have insiders been trading Northwest Natural Gas Co (NYSE:NWN)?

Insider purchases made by high-level executives is at its handiest when the company we’re looking at has experienced transactions within the past six months. Over the last half-year time period, Northwest Natural Gas Co (NYSE:NWN) has seen zero unique insiders purchasing, and 3 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 Northwest Natural Gas Co (NYSE:NWN). These stocks are Niska Gas Storage Partners LLC (NYSE:NKA), Laclede Group Inc (NYSE:LG), Summit Midstream Partners LP (NYSE:SMLP), PAA Natural Gas Storage, L.P. (NYSE:PNG), and Clean Energy Fuels Corp (NASDAQ:CLNE). All of these stocks are in the gas utilities industry and their market caps resemble NWN’s market cap.