In the eyes of most investors, hedge funds are assumed to be slow, old investment vehicles of years past. While there are over 8000 funds trading today, we at Insider Monkey look at the crème de la crème of this group, close to 450 funds. It is estimated that this group controls the majority of the hedge fund industry’s total capital, and by monitoring their highest performing equity investments, we have discovered a number of investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Just as beneficial, optimistic insider trading activity is a second way to break down the world of equities. Obviously, there are many reasons for a corporate insider to drop shares of his or her company, but just one, very obvious reason why they would buy. Many academic studies have demonstrated the market-beating potential of this tactic if “monkeys” understand where to look (learn more here).
With all of this in mind, it’s important to take a glance at the key action surrounding PG&E Corporation (NYSE:PCG).
What does the smart money think about PG&E Corporation (NYSE:PCG)?
At year’s end, a total of 14 of the hedge funds we track held long positions in this stock, a change of -7% from the third quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings significantly.
When looking at the hedgies we track, John A. Levin’s Levin Capital Strategies had the biggest position in PG&E Corporation (NYSE:PCG), worth close to $114 million, comprising 2.3% of its total 13F portfolio. On Levin Capital Strategies’s heels is D E Shaw, managed by D. E. Shaw, which held a $67 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other peers that are bullish include Stanley Druckenmiller’s Duquesne Capital, Ken Griffin’s Citadel Investment Group and Jim Simons’s Renaissance Technologies.
Due to the fact that PG&E Corporation (NYSE:PCG) has faced bearish sentiment from the aggregate hedge fund industry, logic holds that there was a specific group of hedge funds who sold off their full holdings in Q4. At the top of the heap, Andrew R. Midler’s Savitr Capital sold off the biggest investment of the “upper crust” of funds we key on, valued at about $3 million in stock.. Daniel S. Och’s fund, OZ Management, also dropped its call options., about $2 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 1 funds in Q4.
How are insiders trading PG&E Corporation (NYSE:PCG)?
Bullish insider trading is most useful when the company in question has seen transactions within the past six months. Over the last 180-day time period, PG&E Corporation (NYSE:PCG) has experienced zero unique insiders purchasing, 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 PG&E Corporation (NYSE:PCG). These stocks are Edison International (NYSE:EIX), Korea Electric Power Corporation (ADR) (NYSE:KEP), FirstEnergy Corp. (NYSE:FE), Consolidated Edison, Inc. (NYSE:ED), and PPL Corporation (NYSE:PPL). This group of stocks belong to the electric utilities industry and their market caps resemble PCG’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Edison International (NYSE:EIX) | 18 | 0 | 6 |
| Korea Electric Power Corporation (ADR) (NYSE:KEP) | 10 | 0 | 0 |
| FirstEnergy Corp. (NYSE:FE) | 14 | 0 | 10 |
| Consolidated Edison, Inc. (NYSE:ED) | 15 | 1 | 0 |
| PPL Corporation (NYSE:PPL) | 16 | 0 | 7 |
With the returns exhibited by the aforementioned research, retail investors must always pay attention to hedge fund and insider trading sentiment, and PG&E Corporation (NYSE:PCG) shareholders fit into this picture quite nicely.
