Hedge Funds Are Betting On Public Service Enterprise Group Inc. (PEG)

Public Service Enterprise Group Inc. (NYSE:PEG) was in 11 hedge funds’ portfolio at the end of March. PEG has experienced an increase in hedge fund interest lately. There were 9 hedge funds in our database with PEG positions at the end of the previous quarter.

According to most traders, hedge funds are perceived as slow, old financial tools of the past. While there are greater than 8000 funds in operation at present, we at Insider Monkey hone in on the moguls of this club, close to 450 funds. Most estimates calculate that this group oversees most of all hedge funds’ total asset base, and by watching their top equity investments, we have unearthed a few investment strategies that have historically beaten the broader indices. 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 began to sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).

Just as key, positive insider trading activity is another way to parse down the financial markets. Just as you’d expect, there are lots of motivations for a bullish insider to drop shares of his or her company, but just one, very clear reason why they would behave bullishly. Various academic studies have demonstrated the valuable potential of this tactic if “monkeys” know where to look (learn more here).

With these “truths” under our belt, we’re going to take a gander at the latest action surrounding Public Service Enterprise Group Inc. (NYSE:PEG).

How are hedge funds trading Public Service Enterprise Group Inc. (NYSE:PEG)?

Heading into Q2, a total of 11 of the hedge funds we track were bullish in this stock, a change of 22% from the first quarter. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their stakes considerably.

When looking at the hedgies we track, David Harding’s Winton Capital Management had the most valuable position in Public Service Enterprise Group Inc. (NYSE:PEG), worth close to $26.6 million, accounting for 0.5% of its total 13F portfolio. The second largest stake is held by Cliff Asness of AQR Capital Management, with a $14.1 million position; 0.1% of its 13F portfolio is allocated to the company. Other hedgies that are bullish include Jacob Gottlieb’s Visium Asset Management, Israel Englander’s Millennium Management and Matthew Tewksbury’s Stevens Capital Management.

Now, key hedge funds were leading the bulls’ herd. Visium Asset Management, managed by Jacob Gottlieb, initiated the largest position in Public Service Enterprise Group Inc. (NYSE:PEG). Visium Asset Management had 6.9 million invested in the company at the end of the quarter. Matthew Tewksbury’s Stevens Capital Management also made a $3.1 million investment in the stock during the quarter. The other funds with brand new PEG positions are Steven Cohen’s SAC Capital Advisors and John Overdeck and David Siegel’s Two Sigma Advisors.

How have insiders been trading Public Service Enterprise Group Inc. (NYSE:PEG)?

Insider trading activity, especially when it’s bullish, is particularly usable when the primary stock in question has experienced transactions within the past six months. Over the latest half-year time frame, Public Service Enterprise Group Inc. (NYSE:PEG) has experienced zero unique insiders buying, and 2 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 Public Service Enterprise Group Inc. (NYSE:PEG). These stocks are NRG Energy Inc (NYSE:NRG), NiSource Inc. (NYSE:NI), Exelon Corporation (NYSE:EXC), CenterPoint Energy, Inc. (NYSE:CNP), and Northeast Utilities System (NYSE:NU). All of these stocks are in the diversified utilities industry and their market caps resemble PEG’s market cap.

With the results exhibited by the aforementioned tactics, retail investors must always pay attention to hedge fund and insider trading activity, and Public Service Enterprise Group Inc. (NYSE:PEG) applies perfectly to this mantra.

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