Hedge Funds Are Crazy About NiSource Inc. (NI)

What’s a smart NiSource Inc. (NYSE:NI) investor to do?

In the eyes of many traders, hedge funds are perceived as bloated, old financial tools of a forgotten age. Although there are over 8,000 hedge funds with their doors open currently, this site looks at the crème de la crème of this group, around 525 funds. It is assumed that this group controls the majority of the smart money’s total assets, and by paying attention to their highest performing stock picks, we’ve unearthed a few investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy outstripped 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 outpaced the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).

Just as useful, optimistic insider trading activity is another way to analyze the world of equities. Just as you’d expect, there are a number of reasons for a bullish insider to sell shares of his or her company, but just one, very simple reason why they would behave bullishly. Several empirical studies have demonstrated the impressive potential of this method if piggybackers know what to do (learn more here).

What’s more, let’s study the latest info surrounding NiSource Inc. (NYSE:NI).

How have hedgies been trading NiSource Inc. (NYSE:NI)?

Heading into Q3, a total of 19 of the hedge funds we track were bullish in this stock, a change of 46% from one quarter earlier. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were boosting their stakes meaningfully.

When using filings from the hedgies we track, Israel Englander’s Millennium Management had the biggest position in NiSource Inc. (NYSE:NI), worth close to $81.3 million, accounting for 0.2% of its total 13F portfolio. The second largest stake is held by Renaissance Technologies, managed by Jim Simons, which held a $56.3 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining hedgies that are bullish include Louis Navellier’s Navellier & Associates, David Harding’s Winton Capital Management and Ken Griffin’s Citadel Investment Group.

Consequently, particular hedge funds have been driving this bullishness. Millennium Management, managed by Israel Englander, created the most valuable position in NiSource Inc. (NYSE:NI). Millennium Management had 81.3 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $56.3 million investment in the stock during the quarter. The following funds were also among the new NI investors: Louis Navellier’s Navellier & Associates, David Harding’s Winton Capital Management, and Ken Griffin’s Citadel Investment Group.

What do corporate executives and insiders think about NiSource Inc. (NYSE:NI)?

Bullish insider trading is at its handiest when the primary stock in question has experienced transactions within the past 180 days. Over the latest six-month time frame, NiSource Inc. (NYSE:NI) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also examine the relationship between both of these indicators in other stocks similar to NiSource Inc. (NYSE:NI). These stocks are Public Service Enterprise Group Inc. (NYSE:PEG), Northeast Utilities System (NYSE:NU), CenterPoint Energy, Inc. (NYSE:CNP), Ameren Corp (NYSE:AEE), and NRG Energy Inc (NYSE:NRG). This group of stocks belong to the diversified utilities industry and their market caps match NI’s market cap.

Using the results shown by Insider Monkey’s analyses, average investors must always pay attention to hedge fund and insider trading sentiment, and NiSource Inc. (NYSE:NI) shareholders fit into this picture quite nicely.

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